The RBI on Wednesday announced the second tranche of Open Market Purchase of Government of India Securities under G-sec Acquisition Programme (G-SAP 1.0). As announced in the RBI Governor s statement of May 5, the second tranche of G-sec purchase will involve buying back securities of Rs 35,000 crore. The Reserve Bank will purchase the Government securities maturing between November to March 2035. These securities bear coupon rate ranging from 5.85 per cent to 7.17 per cent. The securities will be bought through a multi-security auction using the multiple price method. The Reserve Bank has reserved the right to decide on the quantum of purchase of individual securities as well as accept bids for less than the aggregate amount.
May 07, 2021
Rates had risen in last couple of days
Government securities (G-Sec) prices declined on Friday, despite the weekly auction G-Sec sailing through comfortably, as market players decided to book profits.
G-Sec prices had risen over the last couple of days due to Reserve Bank of India(RBI) Governor Shaktikanta Das’ announcement that RBI will increase the quantum of G-Secs it will purchase at the second auction under the G-Sec Acquisition Programme (GSAP) to ₹35,000 crore against ₹25,000 crore it purchased at the first auction.
However, the gains made by G-Secs over the last couple of days were nullified due to profit booking.
RBI to make 2nd purchase of G-secs worth Rs 35,000 cr under G-SAP 1.0 on May 20: Das
RBI on Wednesday said the second purchase of government securities worth Rs 35,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) will be done on May 20
RBI chief Shaktikanta Das
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RBI on Wednesday said the second purchase of government securities worth Rs 35,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) will be done on May 20 for an orderly evolution of the yield curve as a fresh COVID-19 wave threatens to hit the economy.
The first purchase of Rs 25,000 crore last month received enthusiastic response from the market, Reserve Bank of India (RBI) Governor Shaktikanta Das said while announcing slew of measures to provide relief to various segments of economy hit by the second wave of the pandemic.