The Banker’s Bank, RBI on May 12 announced the second tranche of Open Market Purchase of Government of India Securities under G-sec Acquisition Programme with a view to enabling a stable and orderly evolution of the yield curve.
Under G-SAP 1.0, RBI has committed upfront to a specific amount (₹1-lakh crore in the first quarter of FY22) of open market purchases of G-Secs to enable a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions.
The central bank’s purchase of G-Secs under the second tranche will be ₹10,000 crore more vis-a-vis the first tranche of purchase auction.
The first such auction of Rs 25,000 crore was held on April 15.
Release read as
The Reserve Bank will purchase seven government securities (G-Secs), maturing between 2024 and 2035, aggregating ₹35,000 crore under the second tranche of its G-Sec Acquisition Programme (G-SAP 1.0) on May 20.
RBI Governor earlier commented
Shaktikanta Das, “Under the programme, which will be for 2021-22, RBI will commit upfront to a specific amount of open market purchases of government securities with a view to enabling a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions.”
Meanwhile, the Government has announced the conversion/switch of 10 G-Secs for an aggregate amount of ₹20,000 crore (face value) on May 17, 2021.
Under the conversion/ switch, 10 G-Secs (carrying different coupon rates and maturity dates) maturing in 2022, 2023 and 2024, will be converted into as many destination Securities, maturing in 2033, 2035 and 2061.
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