RBI Will Buy Security Bonds Worth 25 Thousand Crores

RBI will buy security bonds worth 25 thousand crores, which will mature by this date.

The Reserve Bank of India will make an open market purchase of government securities worth Rs 25,000 crore on August 26 under the Government Securities Acquisition Program (G-SAP 2.0).

The open market buying was announced by the RBI after the monetary policy review meeting earlier this month. It had said that it would auction Rs 25,000 crore on August 13 and 26.

Using the Multiple Price Method through a Multi-Security Auction.

In the latest auction, the Reserve Bank of India will buy government securities through a multi-securities auction using the multiple price method.

The purchase will be of securities maturing between January 2026 and June 2035. The coupon rate of Reserve Bank of India securities varies from 6.64 percent to 8.28 percent.

RBI will buy security bonds: Reserves the right to accept bids less than the total amount.

The apex bank Reserve Bank of India said that it will reserve the right to decide the quantum of purchase of individual securities and accept bids less than the total amount.

It will buy marginally higher/lesser than the total amount due for round-off or accept or reject any or all bids in whole or in part without assigning any reason thereof.

The result of the auction will be announced on the same day.

According to the Reserve Bank of India, the result of the auction will be announced on the same day and successful participants should ensure the availability of securities in their SGL account by noon on August 27.

Auctions help in maintaining the yield curve of the bonds and ensure liquidity in the system.

Focus on securities across the spectrum.

The Reserve Bank of India’s recent G-SAP (what is G-SAP 2.0) auctions have focused on securities across the maturity spectrum, to ensure that all segments of the yield curve remain liquid.