The Reserve Bank of India has announced special open market operations of government securities worth Rs 10,000 crore. ‘On a review of current and evolving liquidity and market conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs 10,000 crores each on July 02, 2020,’ the RBI said.

The RBI said it will buy long-dated government securities maturing between May-2027 and December 2033. On the other hand it will sell securities that mature between October 2020 and April 2021.

The RBI said it reserves the right to decide on the quantum of purchase/sale of individual securities, accept bids/offers for less than the aggregate amount, purchase/sell marginally higher/lower than the aggregate amount due to rounding-off or accept or reject any or all the bid/offers either wholly or partially without assigning any reasons.

Meanwhile, amid the ongoing economic woes created by the coronavirus pandemic, the Reserve Bank has decided to extend the enhanced borrowing facility provided to the banks to meet their liquidity shortages till September 30.

The RBI, as a temporary measure, had increased the borrowing limit of scheduled banks under the marginal standing facility (MSF) scheme from 2 per cent to 3 per cent of their Net Demand and Time Liabilities (NDTL) with effect from March 27, 2020. Under the MSF, banks can borrow overnight funds at their discretion by dipping into the Statutory Liquidity Ratio (SLR).

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This relaxation, which was granted till June 30, 2020, has now been extended till September 30.