This is the fourth OMO bond purchase announced by the central bank since the bi-monthly policy statement on December 5.
The central bank releases liquidity worth Rs 50,000 crore through such bond purchases, essentially from banks. The market has been grappling with tight liquidity conditions ever since the US Fed started hiking policy rates from December 2017.
The RBI had kept its policy repo rate unchanged at 6.5 per cent in its recent policy meeting. The decision of MPC is consistent with the stance of calibrated tightening of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index inflation of 4 per cent within a band of +/- 2%, while supporting growth, the RBI had said in its December policy statement.