The OMOs in SDLs are a special case this year, but could become the norm going forward if the markets are enthusiastic enough to trade the papers in the secondary markets, say experts.
States are now trying to minimise their bond issues and are clubbing the borrowing needs by re-issuing papers used earlier. This helps in secondary markets trading and the central bank can then chip in with more OMOs in SDLs in the future.
Separately, the RBI
on Thursday announced Rs 20,000 crore of OMO purchase of central government bonds.
The OMO purchase will be done in bonds maturing between 2025 and 2032.
This is the second outright OMO purchase of central bonds that the RBI
will conduct this fiscal year. In the last auction, the RBI
had purchased Rs 20,000 crore of bonds. The RBI doubled the size of OMO auctions on October 9 monetary policy. Yields on the 10-year bond closed at 5.9149 per cent, flat from its previous close.