RBI to boost liquidity with large bond buys and $10 billion dollar swap
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The Reserve Bank of India (RBI) announced a set of measures on Monday to inject liquidity into the banking system after reviewing current liquidity and financial conditions.
In a statement, the central bank said it will conduct open market operation (OMO) purchase auctions of Government of India securities worth a total of ₹2 lakh crore. These purchases will be made in four separate tranches of ₹50,000 crore each.
The four OMO auctions are scheduled for December 29, 2025, January 5, 2026, January 12, 2026, and January 22, 2026. Through these purchases, the central bank will buy government bonds from the market, which is expected to increase the availability of funds with banks.
According to the RBI circular, "OMO purchase auctions of Government of India securities for an aggregate amount of ₹2,00,000 crore in four tranches of ₹50,000 crore each to be held on December 29, 2025, January 05, 2026, January 12, 2026, and January 22, 2026."
The RBI also announced a USD/INR buy/sell swap auction of USD 10 billion with a tenor of three years. This auction is scheduled to take place on January 13, 2026. Such swap operations help improve rupee liquidity in the system while managing foreign exchange reserves.
"USD/INR Buy/Sell Swap auction of USD 10 billion for a tenor of 3 years to be held on January 13, 2026," per the circular.
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In its statement, the central bank said detailed instructions for each of the announced operations will be issued separately. These instructions will include operational guidelines and eligibility criteria for market participants.
The move occurs when liquidity conditions remain tight due to factors like tax outflows and government cash balances. By injecting liquidity through bond purchases and foreign exchange swap operations, the RBI aims to ensure that banks have sufficient funds to support credit growth and meet short-term funding needs, according to analysts.
The central bank said it will continue to monitor evolving liquidity and market conditions closely. "The Reserve Bank will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions," per the circular.