RBI liquidity boost 2026: ₹2 lakh cr OMO, $10bn swap

What the RBI announced and why it matters

The Reserve Bank of India (RBI) said it will buy government securities worth ₹2 lakh crore through open market operations (OMO) and conduct a USD 10 billion dollar-rupee buy/sell swap auction to inject liquidity into the banking system. The central bank said the OMO purchase and swap operations will be conducted between December 29, 2025 and January 22, 2026. The announcement comes against the backdrop of RBI closely tracking liquidity and market conditions. The RBI also said it will continue to monitor evolving conditions and take measures as appropriate to ensure orderly liquidity conditions.

OMO purchases: ₹2 lakh crore split across four auctions

The RBI said OMO purchase auctions of Government of India securities for an aggregate amount of ₹2,00,000 crore will be held in four tranches. Each tranche is sized at ₹50,000 crore. The scheduled dates are December 29, 2025, January 5, 2026, January 12, 2026, and January 22, 2026. These purchases are designed to inject rupee liquidity into the banking system by adding durable funds through secondary market bond buying.

Dollar-rupee swap: USD 10 billion for three years

Alongside OMOs, the RBI said it will hold a USD/INR buy/sell swap auction of USD 10 billion for a tenor of three years on January 13, 2026. The RBI described the swap as a simple buy/sell foreign exchange swap from the central bank’s side. Under this structure, a bank sells US dollars to the RBI and simultaneously agrees to buy the same amount of US dollars at the end of the swap period. In practical terms, the RBI’s purchase of dollars increases rupee liquidity in the system.

How the measures will be executed

The RBI indicated that detailed instructions for each operation will be issued separately. The OMO programme is explicitly laid out as four separate auctions, each with a defined size and date. The swap is a single operation on the specified date with a three-year tenor. Together, the two tools target liquidity conditions through both domestic bond-market operations and foreign-exchange-linked liquidity infusion.

Recent context: earlier OMO and swap operations

The RBI’s latest announcement came days after it conducted ₹1 lakh crore of OMO purchase auctions of Government of India securities. It also conducted a USD/INR buy/sell swap auction of USD 5 billion for a tenor of three years, as per the information provided. The central bank said that on a review of current liquidity and financial conditions, it decided to conduct these additional OMO and swap operations to inject liquidity into the banking system.

Market demand signals from a USD 10 billion swap auction

Separate updates in the provided material described a USD 10 billion USD/INR buy/sell swap auction for three years that elicited strong demand. One account said the auction was oversubscribed 2.23 times, with a cutoff rate set at ₹5.86. Another description stated the RBI received bids worth USD 16.23 billion, accepted 161 out of 244 bids, and allotted USD 10.06 billion for a three-year tenure. In that version, the cut-off premium was set at ₹6.55 and the average premium on accepted bids was ₹6.73.

Liquidity backdrop: deficit conditions highlighted

The same set of details also pointed to persistent liquidity deficit conditions in the banking system. Net liquidity was cited as being in a deficit of ₹1.81 trillion (₹1,81,000 crore) as of Thursday in one update, and in deficit mode for eleven consecutive weeks. Market participants also said the RBI intervened in the foreign exchange market via dollar sales to curb excess volatility, based on the information provided.

Key dates and sizes at a glance

What investors and banks typically watch next

For banks, OMO purchases can influence system liquidity and bond-market dynamics because the RBI is a large buyer of government securities. For currency markets, the swap framework matters because banks exchange dollars for rupees with a commitment to reverse the transaction later, which can inject rupee liquidity for the tenor. The RBI’s statement that it will monitor conditions and act as appropriate signals that these operations sit within a broader liquidity management framework. Any additional operational instructions and auction results would be the next concrete datapoints for markets.

Conclusion

The RBI has set out a defined liquidity infusion plan combining ₹2 lakh crore of OMO purchases across four auctions and a USD 10 billion three-year USD/INR buy/sell swap auction. The operations are scheduled between December 29, 2025 and January 22, 2026, with the swap on January 13, 2026. The central bank has also reiterated that it will keep monitoring liquidity and market conditions, and issue detailed instructions for each operation separately.