RPT-India cbank says to conduct open market ops in oil bonds
June, 02nd 2008
The Reserve Bank of India (RBI) on Friday said it will conduct open market operations in the secondary market in oil bonds held by state-run oil companies to provide liquidity to crude refiners.
It said it would conduct outright or repo operations on an ad hoc basis, subject to an overall ceiling of 10 billion rupees on any single day.
"The special market operations would improve the access of public sector oil companies to domestic liquidity and alleviate the lumpy demand in the foreign exchange market in the current extraordinary situation," a central bank statement said.
The central bank will provide equivalent foreign exchange via designated banks to oil firms at market exchange rates, it said.
It said the liquidity and other issues currently faced by oil companies had systemic implications for the smooth functioning of financial markets and for overall financial stability. (Reporting by Anurag Joshi; editing by Sunil Nair)