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The Reserve Bank of India (RBI) will buy five Government Securities (G-Secs) aggregating ₹20,000 crore under its G-sec Acquisition Programme (G-SAP 2.0) on July 8.
This will be the first purchase of G-Secs under G-SAP 2.0. The central bank will be purchasing five G-Secs, maturing between 2027 and 2033.
Overall, in the second quarter, the central bank will conduct open market purchase of G-Secs of ₹1.2 lakh crore under the G-SAP to support the market.
Under G-SAP 1.0, RBI committed upfront 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 endeavour (of G-SAP) will be to ensure congenial financial conditions for the recovery to gain traction…The positive externalities of G-SAP 1.0 operations need to be seen in the context of those segments of the financial markets that rely on the G-sec yield curve as a pricing benchmark,” RBI Governor Shaktikanta Das said in a statement on April 7, 2021.
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