RBI Conducts ₹50,000-Crore OMO to Ease Liquidity

The Reserve Bank of India has undertaken a major liquidity infusion, purchasing government securities worth ₹50,000 crore through an Open Market Operation on Thursday. The move aims to ease tight liquidity conditions in the financial system.

Large Market Response to RBI’s Auction

Against the notified ₹50,000 crore, banks and market participants offered bids totalling ₹1,11,615 crore. This strong response indicates significant demand for liquidity support at a time when funding costs have been elevated.

Part of a Pre-Announced Liquidity Plan

Earlier this month, the central bank announced OMO purchases totalling ₹1 lakh crore, to be executed in two tranches—on 11 December and 18 December 2025. Thursday’s operation marked the first tranche under this schedule.

How OMO Purchases Inject Liquidity

Under OMO purchases, the RBI buys government securities from banks or the open market. This releases cash into the system, supporting smoother lending conditions and stabilising short-term interest rates amid liquidity pressures.

Exam Oriented Facts

• RBI conducted an OMO purchase of ₹50,000 crore on 11 December 2025.
• Total bids received were ₹1,11,615 crore, more than double the notified amount.
• OMO purchases inject liquidity by releasing funds to banks in exchange for government securities.
• The RBI planned two OMOs of ₹50,000 crore each in December 2025.

Second Tranche Scheduled for 18 December

The next OMO purchase of ₹50,000 crore will be held on 18 December. With liquidity conditions expected to remain strained, the operation is likely to play a key role in maintaining market stability.