RBI announces ₹2 lakh crore OMO and $10 billion dollar swap to ease liquidity

The OMO purchases will be conducted in four tranches between December 29 and January 22, while the dollar swap auction is scheduled for January 13. RBI said it will continue to monitor liquidity conditions and act as needed.
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FRANCIS MASCARENHAS

In response to banking system liquidity challenges, the Reserve Bank of India has unveiled dual measures: open market acquisitions of government securities totaling ₹2 lakh crore and a USD/INR three-year Buy/Sell Swap auction of $10 billion.

These actions address a liquidity shortfall of ₹54,852 crore recorded on December 22, 2025, driven primarily by government cash reserve buildups following advance tax collections.

Earlier interim relief was provided through variable rate repo auctions, followed by substantial liquidity injections via ₹1 lakh crore in OMO purchases and $5 billion in forex swaps during December.

OMO Purchase Strategy

The RBI will execute four sequential OMO purchase rounds of ₹50,000 crore each, scheduled for December 29, 2025, January 5, 2026, January 12, 2026, and January 22, 2026. This phased approach targets sustained liquidity stabilization.

Forex Market Intervention

Concurrently, a three-year USD/INR Buy/Sell Swap auction worth $10 billion will occur on January 13, 2026. This move enhances dollar reserves for potential currency market interventions while managing rupee volatility.

The central bank emphasized continuous assessment of liquidity dynamics, pledging additional measures if required to maintain financial system equilibrium.

Short-Term Liquidity Boost

Complementing these measures, a two-day variable rate repo auction on December 24 will infuse ₹1.25 lakh crore to alleviate immediate liquidity pressure ahead of year-end financial commitments.

Published on December 23, 2025