RBI proposes borrowing, lending of government securities

RBI Monetary Policy Live: RBI Governor Shaktikanta Das sees July-September 2023 GDP growth seen at 6.2 percent versus 5.9 percent earlier

The Reserve Bank of India (RBI) governor Shaktikanta Das on February 8 proposed the borrowing and lending of government securities to improve liquidity and price discovery in the securities market.

"This will provide investors an avenue to deploy in their ideal securities, enhance portfolio returns, and facilitate wider participation," Das said while announcing the monetary policy committee's decision.

Das further added that this measure will add depth and liquidity to the G-Sec market, aid efficient price discovery, work towards completion of smooth market borrowing programme of the centre and states.

The governor also announced the restoration of government securities market timing to pre pandemic. G-Sec market will now be operational between 9am and 5pm.

Meanwhile, the governor announced an increase in repo rate by 25 basis points to 6.50 percent.

The governor also announced the restoration of government securities market timing to pre pandemic. G-Sec market will now be operational between 9am and 5pm.

“It has now been decided to also restore market hours in respect of government securities from 9:00 AM to 3:30 PM to 9:00 AM to 5:00 PM. Accordingly, with effect from Monday, February 13, 2023,” RBI said in a release.

Meanwhile, the governor announced an increase in repo rate by 25 basis points to 6.50 percent.

The MPC also decided by a majority of 4 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.