First purchase of G-secs worth ₹25,000 cr under G-SAP 1.0

The Reserve Bank said the first purchase of government securities worth Rs 25,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) will be done on April 15 with a view to enabling a stable and orderly evolution of the yield curve.

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In the backdrop of the government’s elevated borrowing for this year, which the RBI has to ensure goes through without causing disruption, G-SAP aims to provide more comfort to the bond market.

Market participants always wanted to know the RBI’s Open Market Operations (OMO) purchase calendar, and the RBI has now provided that to the market through this announcement on GSAP.

It will provide certainty to the bond market participants with regard to RBI’s commitment of support to the bond market in FY22.

The announcement of this structured programme will help reduce the spread between the repo rate and the 10-year government bond yield. That, in turn, will help to reduce the aggregate cost of borrowing for the Centre and states in FY22.