India's central bank has not yet decided whether to conduct further bond buybacks under its 200-billion-rupee ($4.3 billion) target and will take a call after looking at the liquidity situation, two official sources said.
"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 central bank to conduct more bond buybacks within the planned 200-billion-rupee target to ease the liquidity situation following the outflows toward broadband, third-generation spectrum payments and advance taxes.
The central bank has bought back 91.14 billion rupees of bonds in two auctions since announcing the 200-billion-rupee 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.