The Reserve Bank of India (RBI) announced another open market operations (OMO) of Rs 30,000 crore after its auction held on Friday elicited a positive response.

The central bank is purchasing government securities not only to boost liquidity in the markets, but also soften yields on corporate bonds and commercial paper as the spread of coronavirus has seen foreign portfolio investors (FPIs) exiting the riskier asset classes and moving on to safe havens such as the dollar.

The RBI said in a statement that with the Covid-19 related dislocations, stress in certain financial market segments is still severe and financial conditions remain tight and that its endeavour is to ensure that all markets segments function normally with adequate liquidity and turnover.

“Accordingly, on a review of the current liquidity and financial conditions, the Reserve Bank has decided to conduct purchase of government securities under OMOs for an aggregate amount of Rs 30,000 crore in two tranches of Rs 15,000 crore each in the month of March,’’ the statement added. The RBI disclosed that the first purchase auction will be conducted on March 24 for Rs 15,000 crore in two-year, five-year, six-year and nine- year government securities.

Yields on the benchmark 10-year government security was trading at 6.23 per cent after the announcement against its previous close of 6.40 per cent.

Meanwhile, the OMO auction of Rs 10,000 crore that was held on Friday received a good response.

The RBI received a cumulative offer of Rs 45,049 crore for four government securities. For instance, in the 8.20 per cent 2022 security, it received 59 offers totalling Rs 10,579 crore. Of this, the RBI accepted 12 offers totalling Rs 4,285 crore.