RBI yet to decide on more bond buybacks.

The Reserve Bank of India (RBI) has not yet decided whether to conduct further bond buybacks under its Rs 20000 crore (USD 4.3 billion) target and will take a call after looking at the liquidity situation, two official sources told Reuters.

"We have not yet decided on conducting or not conducting more bond buybacks. This will depend on liquidity situation, call money rate," said a source with direct knowledge.

"Market is not asking for additional liquidity. That is why it is not showing up in call, CBLO (collateralised borrowing and lending obligation) rates. I don't see any panic in the market."

Market players expect the RBI to conduct more bond buybacks within the planned Rs 20000 crore target to ease the liquidity situation following the outflows toward broadband, third-generation spectrum payments and advance taxes.

The RBI has bought back Rs 9114 crore of bonds in two auctions since announcing the Rs 20000 crore buyback programme.

The government is also not planning to change its scheduled borrowing programme in the first half of the current financial year, the sources said.

"There is a borrowing programme for H1 (first half). If we cancel or postpone any auction, when will we borrow, where will we adjust that? As of now borrowing schedule for H1 stands," another source said.

Source : Money Control.com