Limited Period Offer:Be a PRO for 1 month @Rs49/-Multiple payment options available. Know More
you are here: HomeNewsBusiness

RBI Governor Shaktikanta Das announces second purchase of govt securities worth Rs 35,000 crore under G-SAP 1.0

In the second purchase under G-SAP, the government will buy securities worth Rs 35,000 crore.

May 05, 2021 / 11:43 AM IST
RBI Governor Shaktikanta Das (file image)

RBI Governor Shaktikanta Das (file image)

Reserve Bank of India (RBI) Governor Shaktikanta Das on May 5 announced the second purchase of government securities (G-Secs) under the Government Securities Acquisition Programme (G-SAP) 1.0 to be conducted on May 20, 2021.

In the second purchase under G-SAP, the government will buy securities worth  Rs 35,000 crore. The RBI had first announced G-SAP 1.0 in its monetary policy on April 7, 2021.

Das also listed out other measures from the RBI to counter the second wave of the pandemic.

Usually, the central bank periodically purchases G-Secs through Open Market Operations (OMOs). With the introduction of G-SAP 1.0, the central bank made an upfront commitment to the markets that it will purchase bonds worth a specific amount along with announcing the advance calendar for purchasing G-Secs.

“The endeavour will be to ensure congenial financial conditions for the recovery to gain traction. For Q1 of 2021-22, therefore, it has been decided to announce a G-SAP of Rs One lakh crore,” the RBI had announced earlier when it launched G-SAP 1.0 on April 7.


COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

On April 15, RBI had conducted the first phase of open market purchase with five dated securities for an amount aggregating to Rs 25,000 crore.

The first purchase was made through a multiple price method under which the bidders paid at the respective rate they had bid for. The RBI had notified four securities for the G-Sec purchase in different maturities.

"Forex reserves of $588 billion give us the confidence to deal with global spillovers," Das said in his address today.

"The first G-SAP auctions elicited an enthusiastic response. G-SAP is contributing to softening of government security yields and in turn private sector borrowing in the market."
 Das acknowledged the second wave of coronavirus that has hit the country adding that the new mutant strains have emerged, causing a severe strain on health infrastructure.

"Global economy is exhibiting incipient signs of recovery supported by fiscal, monetary stimulus. The global outlook is highly uncertain and clouded with risks," Das noted.

Moneycontrol News
first published: May 5, 2021 10:33 am

stay updated

Get Daily News on your Browser