The Reserve Bank of India (RBI) has announced sale as well as purchase of Government Securities (GS) parallely under open market operations (OMOs).
On 25th February 2021, it will purchase ‘5.22% GS 2025’, ‘6.45% GS 2029’ and ‘6.57% GS 2033’. While the sale includes short-dated securities ‘8.79% GS 2021’ and ‘8.20% GS 2022’ maturing in November this year and February 2022.
RBI has been making attempts to keep the yield on the 10-year benchmark bond below 6% to support the government’s borrowing programme. It has been conducting OMOs and has also been directly intervening in the secondary market to smoothen the yield curve.
So far this fiscal, the RBI has undertaken OMO purchases of GS of Rs 4.07 trillion and OMO purchases of state development loans of Rs 30,000 crore.
Further, the result of the auctions will be announced on the same day and successful participants should ensure availability of funds/securities in their Current account/SGL account on 26th February 2021.
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Knowledge Source:
Auction for Sale of Government Securities on 18th February