Under G-SAP, RBI to purchase ₹1.20 lakh cr worth G-Secs in Q2

The Reserve Bank of India (RBI) has decided to purchase Government Securities (G-Sec) aggregating ₹1.20 lakh crore in the second quarter (July-September) of FY22 under its G-Sec Acquisition Programme or G-SAP 2.0.

Under G-SAP 2.0, RBI will be purchasing G-Secs aggregating ₹20,000 crore more than under G-SAP 1.0.

The third and last tranche of open market purchase of G-Secs aggregating ₹40,000 crore under G-SAP 1.0 will be held on June 17, 2021. Of this, ₹10,000 crore would constitute a purchase of state development loans (SDLs).

Under the programme, RBI commits upfront to a specific amount of open market purchases of G-Secs to enable a stable and orderly evolution of the yield curve amidst comfortable liquidity conditions.

The endeavour is to ensure congenial financial conditions for the recovery to gain traction.