<div><div><div id=":191"><div id=":1ap"><div dir="ltr"><p>The Reserve Bank of India Tuesday announced that it will conduct open market operations (OMO) of government securities worth Rs 20,000 crore in two tranches.</p><p>The step is expected to cut long term interest rates and provide a boost to the economy by making credit cheaper to businesses, industries and other borrowers.</p><p>The auctions would be conducted on August 27, 2020 and September 03, 2020," RBI said.</p><p>The move will bring down soaring yields on long-term government securities and cut down interest rates on longer term loans, thereby, bringing more borrowers of housing, car and industrial loans to the banks.</p><p>The yield on the 10-year benchmark 5.77%, 2030 bond rose to 6.17% on Monday, the highest closing level in four months on fears that rising inflation may hold the RBI from cutting interest rates in the near future.</p><p>The sudden concern on inflation emerged from the minutes of the monetary policy committee's policy review released late last week, which sounded caution on inflation and the future trajectory of rate cuts.</p><p>The RBI’s OMO announcement comes at a time when banks’ lending is almost muted despite a 135-basis-points cut in key interest rates by the central bank in the past seven-eight months.</p><p>"On a review of current and evolving liquidity and market conditions, the RBI has decided to conduct simultaneous purchase and sale of government securities under Open Market Operation (OMO) for an aggregate amount of Rs 20,000 crores in two tranches of Rs 10,000 crores each,” the central bank said in a statement.</p><p>For the OMO to be held on August 27, the RBI will be buying longer-dated government securities maturing between 2024 to 2032 while it will selling securities that mature between October and November this year.</p><p>The present market conditions in India have made investors/customers hesitant in making long-term investments or availing long-term loans.</p></div></div></div></div></div>
<div><div><div id=":191"><div id=":1ap"><div dir="ltr"><p>The Reserve Bank of India Tuesday announced that it will conduct open market operations (OMO) of government securities worth Rs 20,000 crore in two tranches.</p><p>The step is expected to cut long term interest rates and provide a boost to the economy by making credit cheaper to businesses, industries and other borrowers.</p><p>The auctions would be conducted on August 27, 2020 and September 03, 2020," RBI said.</p><p>The move will bring down soaring yields on long-term government securities and cut down interest rates on longer term loans, thereby, bringing more borrowers of housing, car and industrial loans to the banks.</p><p>The yield on the 10-year benchmark 5.77%, 2030 bond rose to 6.17% on Monday, the highest closing level in four months on fears that rising inflation may hold the RBI from cutting interest rates in the near future.</p><p>The sudden concern on inflation emerged from the minutes of the monetary policy committee's policy review released late last week, which sounded caution on inflation and the future trajectory of rate cuts.</p><p>The RBI’s OMO announcement comes at a time when banks’ lending is almost muted despite a 135-basis-points cut in key interest rates by the central bank in the past seven-eight months.</p><p>"On a review of current and evolving liquidity and market conditions, the RBI has decided to conduct simultaneous purchase and sale of government securities under Open Market Operation (OMO) for an aggregate amount of Rs 20,000 crores in two tranches of Rs 10,000 crores each,” the central bank said in a statement.</p><p>For the OMO to be held on August 27, the RBI will be buying longer-dated government securities maturing between 2024 to 2032 while it will selling securities that mature between October and November this year.</p><p>The present market conditions in India have made investors/customers hesitant in making long-term investments or availing long-term loans.</p></div></div></div></div></div>
