RBI's third tranche of open market buying of `40k cr G-Secs on June 17

Mumbai: The Reserve Bank of India on Thursday announced the third tranche of open market purchase of government securities worth Rs 40,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) on June 17, with a view to enabling a stable and orderly evolution of the yield curve.

In April, RBI Governor Shaktikanta Das had said that the RBI will conduct open market purchase of government securities of Rs 1 lakh crore under the G-SAP 1.0 in first quarter of the financial year 2021-22. The first such auction of Rs 25,000 crore was held on April 15 and second one was on May 20 for Rs 35,000 crore.

"...the Reserve Bank will conduct the third tranche of open market purchase of government securities of Rs 40,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) on June 17, 2021," the central bank said in a statement

on Thursday.

Of this, state development loans (SDLs) would be purchased up to Rs 10,000 crore.

As per the RBI, the auctions under G-SAP 1.0 have evoked keen interest from market participants, with bid cover ratios of 4.1 and 3.5, respectively, in the two auctions undertaken so far.

Earlier this month, Das had said that the positive externalities associated with G-SAP 1.0 operations are reflected in other financial market segments, notably corporate bonds and debentures.

The RBI has also decided to undertake G-SAP 2.0 in Q2:2021-22 and conduct secondary market purchase operations of Rs 1.20 lakh crore to support the market.