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Economy
Pradeep Kumar

09/04/21 10:50 AM IST

RBI’s first purchase under G-SAP 1.0

In news

A day after announcing the introduction of the G-sec Acquisition Programme (G-SAP 1.0), the Reserve Bank of India (RBI) announced the Open Market Purchase of Government of India Securities under the programme"

Details
  • “The Reserve Bank will conduct open market purchase of government securities of ₹1 lakh crore under the G-sec Acquisition Programme (G-SAP 1.0) in Q1 2021-22 with a view to enabling a stable and orderly evolution of the yield curve.
  • The first purchase of government securities for an aggregate amount of ₹25,000 crore under G-SAP 1.0 will be conducted on April 15
  • The central bank will purchase five types of government securities via a multi-security auction using multiple price methods.
What is G-SAP?
  • The RBI periodically purchase Government bonds from the market through Open Market Operations (OMOs).
  • The G-SAP is in a way an OMO but there is an upfront commitment by the central bank to the markets that it will purchase bonds worth a specific amount.
  • The idea is to give a comfort to the bond markets. 
Source: The Hindu

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