RBI to conduct ₹1 lakh crore OMO during December to inject liquidity
GS3Economy · S&T · Environment · Security· Monetary policy, RBI & banking· Prelims·
Why in news
The RBI announced a ₹1 lakh crore Open Market Operation (OMO) and a $5 billion USD/INR swap in December to counter a liquidity crunch caused by advance tax payments.
Background
The RBI will purchase government securities worth ₹1 lakh crore via OMOs in December. Additionally, a 3-year USD/INR buy-sell swap of $5 billion is planned to provide durable liquidity.
Facts for Prelims
- FactOMO purchase amount: ₹1 lakh crore in December
- FactUSD/INR buy-sell swap: $5 billion for a duration of 3 years
- BodyRBI: Conducts Open Market Operations (OMO) and Variable Rate Repo (VRRR) operations
- FactLiquidity crunch trigger: Third installment of advance tax payments due on December 15th
For Mains
Q. Discuss the role of Open Market Operations and currency swaps in managing systemic liquidity and stabilizing the exchange rate in a developing economy.
Dimensions to cover in your answer
- Monetary transmission: Balancing liquidity injection with inflation targeting mandates
- Exchange rate stability: Using currency swaps to manage volatility without depleting forex reserves
- Fiscal-Monetary nexus: Managing banking liquidity during peak tax collection cycles
Keywords: Liquidity Management · Open Market Operations · Monetary Policy · Currency Swap · Systemic Stability
More Economy notes
- A.P. Cabinet approves DA hike for govt. employees, State Water Action Plan · 11 December 2025
- 2.5 lakh workers registered under SPREE in A.P., says ESIC official · 11 December 2025
- NIRL inks MoU with Odisha Renewable Energy Development Agency · 11 December 2025
- Telangana focuses on transition of high interest microfinance to smart finance systems · 11 December 2025
- Sarbananda Sonowal flags off India’s first indigenous hydrogen fuel-cell vessel in Varanasi · 11 December 2025
- Govt. spends ₹1,685 crore under CMRF covering nearly 4 lakh patients · 10 December 2025
Something wrong, or something missing?
Spotted a mistake in a note, or want a topic, format or PDF that would help your preparation? Write to us. We read every mail and fix errors fast.
This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.