The Reserve Bank of India (RBI) has completed its latest round of government bond purchases, taking the total for the current financial year (FY26) to an unprecedented ₹3.16 trillion. This marks the highest level of bond acquisitions ever recorded in a single fiscal year, underscoring the central bank’s aggressive liquidity management strategy.
The RBI concluded its open market operation (OMO) this week with a ₹500 billion purchase, largely concentrated in medium-term maturities. Market participants noted that the central bank’s cutoff prices were higher than expected, which helped ease yields in the secondary market. The 10-year benchmark yield fell by nearly six basis points to around 6.60 percent, reflecting investor confidence in the RBI’s intervention.
Officials highlighted that the bond purchases are part of a broader effort to stabilize borrowing costs, support government financing needs, and ensure adequate liquidity in the banking system. The central bank has already cut the repo rate to 5.25 percent and reduced the cash reserve ratio (CRR), measures aimed at boosting credit flow and economic activity.
Another round of bond purchases worth ₹500 billion is scheduled for next week, which could further expand RBI’s holdings and sustain downward pressure on yields. Analysts suggest that the record ₹3.16 trillion in acquisitions demonstrates the RBI’s commitment to balancing growth with financial stability, while reinforcing investor confidence in government securities.
