RBI Announces Open Market Purchase, Sale of G-Secs On September 23


RBI said it decided to conduct the exercise after a review of current liquidity conditions.

New Delhi: The Reserve Bank of India (RBI) on Monday announced that it will conduct open market purchase of government securities under the G-Secs Acquisition Programme (G-SAP 2.0) for an aggregate amount of Rs 15,000 crore. The date of open market purchase has been kept on Thursday (September 23, 2021), the central bank stated in a press release. 

The Reserve Bank said it has decided to conduct simultaneous sale of G-Secs under Open Market Operations (OMO) after “a review of current liquidity conditions.”

The RBI release mentioned that it “reserves the right to: decide on the quantum of purchase/sale of individual securities; accept bids/offers for less than the aggregate amount; purchase/sell marginally higher/lower than the aggregate amount due to rounding-off; and accept or reject any or all the bid/offers either wholly or partially without assigning any reasons.

How To Submit Bid

* Eligible participants should submit their bids/offers in electronic format on the RBI Core Banking Solution (E-Kuber) system between 10:00 am and 11:00 am on September 23.

* Only in the event of system failure, physical bids/offers would be accepted.

* Such physical bid/offer should be submitted to Financial Markets Operations Department in a prescribed form obtainable from the RBI website before 11:00 am.

* The result of the auctions will be announced on the same day.

What’s Open Market Operations (OMO)

Open Market Operations are simultaneous purchase and sale of government securities that involves purchasing G-Secs of longer maturities and selling equal amount of G-Secs of shorter maturities. It is RBI’s version of ‘Operation Twist’. 

The monetary policy tool called ‘Operation Twist’ was first used by the US Federal Reserve in 1961.

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