RBI OMO sale: ₹25,000 crore of G-secs sold to drain liquidity
Why in the news
The Reserve Bank of India (RBI) sold ₹25,000 crore of central government bonds through an open market operation (OMO) sale on 13 October 2026, after citing a review of current and evolving liquidity conditions. Alongside, it ran variable rate reverse repo (VRRR) auctions to soak up surplus cash.
Key facts
- Size: aggregate ₹25,000 crore across six securities, with no security-wise notified amount; the full amount was accepted.
- Demand: 339 bids worth ₹55,518 crore; 132 bids accepted.
- Method: multi-security auction using the multiple price method, with bids placed on RBI’s E-Kuber system.
- Settlement: 14 October 2026.
- 7.10% GS 2034: drew ₹5,660 crore of bids but none was accepted.
| Security | Accepted (₹ crore) | Cut-off yield |
|---|---|---|
| 7.88% GS 2030 | 2,820 | 7.1428% |
| 6.10% GS 2031 | 8,430 | 7.2236% |
| 7.95% GS 2032 | 1,600 | 7.2659% |
| 7.26% GS 2033 | 2,735 | 7.3413% |
| 7.18% GS 2033 | 9,415 | 7.3947% |
| 7.10% GS 2034 | Nil | NA |
VRRR operations
- Overnight VRRR (13 Oct): notified ₹1,50,000 crore; offers of ₹71,580 crore all accepted at a cut-off rate of 5.49%.
- 3-day VRRR (12 Oct): notified ₹2,00,000 crore; offers of ₹37,558 crore all accepted at 5.49%.
About OMO sale
In an OMO sale, RBI sells government securities from its own holdings in the market. Buyers pay with bank funds, so money moves out of the banking system and surplus liquidity falls. An OMO purchase does the opposite and injects cash. A VRRR lets banks park spare funds with RBI at a market-determined rate.
Exam angle
- OMO sale absorbs liquidity; OMO purchase injects it.
- Multiple price method: each winning bidder pays at its own quoted price or yield.
- VRRR is a liquidity absorption tool under RBI’s liquidity management framework.