RBI to conduct open market purchase of govt securities worth Rs 25,000 cr on Aug 26

The Reserve Bank today said it will conduct an open market purchase of government securities of Rs 25,000 crore on August 26, 2021, under the G-sec Acquisition Programme (G-SAP 2.0).

The Reserve Bank will purchase government securities through a multi-security auction using the multiple price method.

The Reserve Bank reserves the right to decide on the quantum of purchase of individual securities, and accept bids for less than the aggregate amount.

The RBI also has the right to purchase marginally higher/lower than the aggregate amount due to rounding-off, and accept or reject bids without any reasons.

Eligible participants will need to submit their bids in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10:00 am and 11:00 am on August 26, 2021.

Only in the event of system failure, physical bids would be accepted. Such a physical bid should be submitted to the Financial Markets Operations Department of the RBI.

The RBI would buy bonds worth 1.2 lakh crore from the secondary market in the July-September quarter under G-SAP 2.0 to maintain liquidity in the economy and hold government bond yields low. The move will help the central bank in calming yields and controlling excessive volatility faced by market participants in the government securities market. G-SAP is an unstructured and unconditional purchase of government bonds by RBI from market players.

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Also read: Central bank to pump in Rs 1.2 lakh cr under G-SAP in Q2FY22