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RBI announces Rs 15000 crore bond buy, sale on September 30

RBI conducts simultaneous buy and sale of government bonds to manage the yield curve in the bond market.

September 23, 2021 / 05:36 PM IST
RBI conducts simultaneous buy and sale of government bonds to manage the yield curve in the bond market.

RBI conducts simultaneous buy and sale of government bonds to manage the yield curve in the bond market.

The Reserve Bank of India (RBI) on September 23 announced Open Market Purchase and simultaneous sale of government bonds for Rs 15,000 crore each on September 30.

As announced in the Governor’s statement of June 04, 2021, the Reserve Bank will conduct the open market purchase of government securities under the G-sec Acquisition Programme (G-SAP 2.0) for an aggregate amount of Rs 15,000 crore on September 30, 2021, the RBI said in a release.

Also, the RBI will sell short-term maturity bonds for the same amount on that day, the RBI said. RBI conducts simultaneous buy and sale of government bonds to manage the yield curve in the bond market.

The RBI periodically purchases Government bonds from the market through 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 comfort to the bond markets. In Governor Das' words, G-SAP is an OMO with a ‘distinct' character. The plan is to enable a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions.
Moneycontrol News
Tags: #G-SAP #RBI
first published: Sep 23, 2021 05:16 pm

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