Second purchase of govt securities worth Rs 35,000 crore on May 20

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday the second purchase of government securities (G-Secs) under the Government Securities Acquisition Programme (G-SAP) 1.0 will be conducted on May 20.

The government will buy securities worth Rs 35,000 crore. The RBI had first announced G-SAP 1.0 in its monetary policy on April 7.

The RBI conducted the first phase of open market purchase on April 15 with five dated securities for an amount aggregating to Rs 25,000 crore.

"The first G-SAP auctions elicited an enthusiastic response. G-SAP is contributing to softening of government security yields and in turn private sector borrowing in the market," said Das.

The first purchase was made through a multiple price method under which the bidders paid at the respective rate they had bid for.

"With system liquidity assured, the RBI is now focusing on increasingly channelising its liquidity operations to support growth impulses, especially at the grassroot level," he said.

Domestic financial conditions remain easy on abundant and surplus system liquidity. The average daily net liquidity absorption under the liquidity adjustment facility (LAF) was at Rs 5.8 lakh crore in April, said Das.

"Forex reserves of 588 billion dollars give us the confidence to deal with global spillovers, he added.

"The global economy is exhibiting incipient signs of recovery supported by fiscal, monetary stimulus. The global outlook is highly uncertain and clouded with risks," said Das while listing other measures to counter the second wave of Covid-19 pandemic.

The RBI Governor announced a term liquidity facility of Rs 50,000 crore to ease access to emergency health services.

Under the scheme, banks can provide fresh lending support to vaccine manufactures; importers/suppliers of vaccines and priority medical devices; hospitals/dispensaries; pathology labs; manufactures and suppliers of oxygen and ventilators; importers of vaccines and Covid related drugs; logistics firms and also patients for treatment.

( With inputs from ANI )

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