RBI's big announcement, Rs 40 thousand cr cash will be infused!
The bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india said on friday that it will buy government securities of different maturity periods on april 17, worth a total of Rs 40,000 crore. This will be the third open market operation (OMO) purchase of securities by the Reserve bank in the current financial year with the aim of increasing liquidity in the banking system. The first purchase of Rs 20,000 crore was made on april 3, while the second purchase of the same amount was made on april 8.
RBI infused about Rs 7 lakh crore into the banking system
Official data showed that since january 2025, the Reserve bank has infused about Rs 7 lakh crore into the banking system. Along with increasing liquidity, the Reserve bank also cut the repo rate twice in february and April. Due to this, the interest rate on loans of banks and NBFCs has come down. Let us tell you that to increase liquidity in the banking system, RBI adopts many methods like Open Market Operation (OMO), Dollar-Rupee Swap and Variable Repo Rate (VRR).
What is Open Market Operation?
Under this policy, RBI buys or sells government securities like bonds, securities to control the money supply. To increase liquidity in the banking system and boost the economy, RBI buys government securities, which brings money to the bank. Banks will be encouraged to give more loans. This will boost economic growth. Similarly, to reduce excess liquidity in the economy, RBI sells government securities, which will reduce the loan giving capacity of banks and in this way less money will reach the market. Open Market Operation is a tool used by the central bank to control inflation, interest rates and money supply.
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