RBI plans to purchase Rs 10,000 cr bond next week

The Reserve Bank of India will aim to buy Rs 10,000 crore worth of bonds through open market operation (OMO) that will be held on September 24. It will purchase three sets of sovereign securities maturing in the next six to 11 years.

The move is aimed at checking rising benchmark bond yields although day traders find it inadequate.

“The RBI needs to do larger OMOs as the sum is not sufficient,” said a bond trader.

The benchmark bond yield rose four basis points to 6.03 percent Thursday.

The central bank will conduct a switch, a window through which it will buy back shorter-duration bonds worth Rs 24,000 crore selling equivalent long-term papers.

This move is aimed at rationalising future maturities of government bonds at a time when New Delhi is battling with the rising cost of a pandemic economy.

The switch will be held on September 21. The government will sell bonds maturing in 2031, 2033 and 2060 as it buys back securities, scheduled to mature in two years.