RBI sells $10.5 billion in bonds to drain cash from surplus banking system
India's central bank announced a massive open market sale of bonds worth $10.5 billion starting September 16, aiming to absorb excess liquidity.
The Reserve Bank of India (RBI) initiated an open market sale of bonds valued at an aggregate of 1 trillion rupees ($10.47 billion). This action begins on September 16 and spans the next fortnight. The first tranche, launching September 17, involves bonds maturing from fiscal 2029 to 2032 worth 500 billion rupees. Subsequent tranches of 250 billion rupees each are scheduled for September 21 and September 28. RBI Governor Sanjay Malhotra stated that no tools remain off the table for managing liquidity. The banking sector holds surplus cash averaging around 10.25 trillion rupees, nearly 3.8% of deposits. This excess occurred after lenders raised $127 billion under a special forex mobilisation scheme, boosting reserves to an all-time high. Elevated oil prices threaten inflationary pressures.
