No switch auctions in February and March 2022: RBI

BL Mumbai Bureau | Updated on: Feb 17, 2022

Decision has been taken as the budgetary provision of switches for the current year has been completed

The Reserve Bank of India (RBI), in consultation with the Government of India, has decided not to conduct the Government Security (G-Sec) switch auctions scheduled to be held in February and March 2022.

This decision has been taken as the budgetary provision of switches for the current year has been completed, the central bank said in a statement.

Switch/ conversion of Government Securities (G-Secs) entails conversion of G-Secs maturing in the near term to longer dated securities. This is done to ease redemption pressure on the Government.

RBI has been conducting auctions for conversion of G-Secs on the third Monday of every month since April 22, 2019.

Bidding in the auction implies that market participants agree to sell the source security/ ies to the Government of India (GoI) and simultaneously agree to buy the destination security from the GoI at their respective quoted prices.

The last switch/ conversion was done on January 28, 2022. In the run-up to the FY23 Union Budget, which was announced on February 1, 2022, the Government did a conversion transaction for G-Secs and oil bonds with RBI for ₹1,19,701 crore (Face Value)

Published on February 17, 2022
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