RBI to Conduct OMO Worth ₹1 Lakh Crore on January 29 to Infuse Liquidity

On Tuesday, January 27, 2026, the Reserve Bank of India (RBI) announced Open Market Operation (OMO), which means that the central bank will move ahead with its plan to purchase government bonds worth 1 trillion rupees ($10.9 billion). RBI preponed the auctions to January 29 and February 5 from the earlier schedule of February 5 and February 12.

Yield Spike Triggers Faster Action

The decision comes after a sharp rise in Indian government bond yields earlier in the day, which pushed the benchmark yield to a near 11-month high. The surge was driven by heavy state government borrowing and tight liquidity conditions in the banking system.

Part of Broader Liquidity Infusion Plan

The two open market operations (OMOs), each involving bond purchases of 500 billion rupees, form part of a wider liquidity support package announced by the Reserve Bank of India (RBI) last week. Through a mix of bond purchases, buy/sell foreign exchange swaps, and repo operations, the RBI aims to inject more than $23 billion into the banking system.

Also Read: RBI Announces $10 Billion USD/INR Swap Auction for February 4, 2026

Record Bond Buying This Fiscal Year

The RBI had already purchased bonds worth 3 trillion rupees during December and January, taking total bond acquisitions for the current financial year to a record 5.7 trillion rupees.

Under Governor Sanjay Malhotra, the RBI has intensified liquidity injections over the past year to strengthen the transmission of rate cuts and to offset the impact of its foreign exchange market interventions aimed at supporting the rupee, which tend to drain liquidity from the banking system.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.