The Reserve Bank of India has net sold bonds worth Rs 1 trillion this financial year — its biggest annual net bond sale in more than a decade, treasury officials said.

The previous record was in FY2018, when the central bank net sold Rs 900 billion to deal with the fallout of demonetisation, according to RBI data available since FY2015.

The RBI is withdrawing liquidity from a banking system flush with cash after it allowed lenders to raise dollars via a special window. The inflow helped protect foreign exchange reserves and support the rupee as oil prices rose, but pushed overnight rates below the policy rate.

Market participants expect the total to double by December. New Delhi recently cut the supply of 3- and 5-year debt for the rest of the fiscal year, signalling more open-market operations ahead.

Either more OMO sales or a hike in banks’ cash reserve ratio would point to tighter monetary policy — consistent with the majority view in a Reuters poll that the RBI will raise its repo rate to 5.50% at the October 5-7 meeting.