Reserve Bank of India (RBI) will buy five Government Securities (G-Secs) aggregating ₹20,000 crore under its G-sec Acquisition Programme (G-SAP 2.0) today.
This will be the first purchase of G-Secs under G-SAP 2.0. The central bank will be purchasing five G-Secs, maturing between 2027 and 2033.
What are government securities or G-Sec?
Government securities are the debt instruments which are issued by the government to borrow money. It is divided into two categories namely,
-Treasury bills are short-term instruments. They get mature in 91 days, 182 days, or 364 days.
-Dated securities which are the long-term instruments. They get mature in between 5 years to 40 years.
Target of 1.2 lakh crore under G-SAP 2.0
The RBI has kept a target of purchansing government securities of ₹1.2 lakh crore under the G-SAP 2.0 in the second quarter of the financial year.
Next purchase on July 22
Next purchase under G-SAP 2.0 will be conducted on July 22 for Rs 20,000 crore. The government securities to be purchased in auction will be communicated in due course, said the RBI.
RBI governor Shaktikanta Das had said earlier this month that the bank will conduct these purchases to support the market.
The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills.