On September 28, 2026, the RBI conducted an OMO sale auction of government securities totaling ₹25,000 crore. The auction attracted ₹67,655 crore in bids, with acceptance at the notified amount.
RBI Absorbs Liquidity via OMO Sale Auction
The Reserve Bank of India conducted an Open Market Operation (OMO) sale auction on September 28, 2026, involving the sale of Government of India dated securities for an aggregate face value of ₹25,000 crore. The auction, settled on September 29, 2026, aimed at moderating excess liquidity in the financial system. The operation drew strong market participation, with total bids reaching ₹67,655 crore—over 2.7 times the notified amount.
Security-Wise Allocation and Cut-Off Yields
The auction included multiple securities across tenors, including 7.59% GS 2029, 6.45% GS 2029, 7.61% GS 2030, and others extending to 7.26% GS 2032. The RBI accepted the full notified amount of ₹25,000 crore, allocating funds across these securities based on competitive bidding. Cut-off yields varied by security, with 7.59% GS 2029 closing at 6.6676% and 6.45% GS 2029 at 6.7201%, reflecting nuanced investor sentiment across maturities.
Market Impact and Monetary Context
The overwhelming response underscores robust investor appetite for government paper despite rising yields. These OMO sales form part of the RBI’s broader liquidity management strategy, complementing daily VRRR operations. For market practitioners, the yield benchmarks set in such auctions serve as critical reference points for pricing in the secondary debt market. Continued OMO activity may signal sustained efforts to tighten liquidity, especially if inflationary pressures persist.