This round of auctions, however, received bids worth Rs 67,540 crore.
This is the only OMO auction, in the current liquidity-enhancement drive, where the RBI has accepted bids lower than the notified amount.
The central bank has been conducting operations to inject durable liquidity into the banking system, which has been in deficit since mid-December. The daily average liquidity deficit in March stood at Rs 1.62 lakh crore.
Economists expect liquidity to ease after April, as government spending is expected to pick up once the next fiscal year starts. As of now, the RBI has injected Rs 2 lakh crore (more than $23 billion) via OMO auctions, and $15 billion via foreign exchange swaps.
“I think the pricing by banks may have been higher than the RBI’s comfort due to which some amount wasn’t accepted. The appetite to sell from the held-to-maturity (HTM) book of banks seems satisfactory,” said Rajeev Pawar, head of treasury, Ujjivan Small Finance Bank.The OMO auction had six securities maturing between 2029 and 2037. The paper maturing in 2033 – the 7.26% GS 2033 – saw the highest demand. Market participants expect more such liquidity infusion operations by the RBI via OMOs to support liquidity.“I expect more OMOs in the next fiscal year and they will be well received. Liquidity easing will be a function of measures taken by the RBI and a pickup in government spending,” Pawar said.
