Reserve Bank of India (RBI) Governor Shaktikanta Das on December 8 said open market operations (OMOs) are not off the table and the central bank will use the tool as the need arises.
"We have not said that OMO sales are off the table. All we have said is that due to certain factors beyond our control, the need for OMO sales has not come up so far," said the governor. The need for OMO sales has not come up so far, but the tool remains on the table and will be used, he added.
OMO refers to the purchase or sale of government securities in the open market by the central bank. Such open market sales lead to a fall in bond prices, pushing up yields. Bond prices and yields move in opposite directions.
The RBI did an outright open market operation (OMO) sales of government securities worth Rs 8,385 crore in September, the central bank said in its monthly bulletin released on November 16.
The highest of the government securities the central bank sold via OMO was on September 15 worth Rs 1,720 crore. This was followed by Rs 815 crore on September 21 and Rs 775 crore on September 25.
The RBI Bulletin is a monthly publication that offers insights into the developments in domestic and global economy.
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