The RBI will conduct an underwriting auction for the sale of government securities worth Rs 26,000 crore on September 3, 2021. The minimum underwriting commitment and minimum bidding commitment under additional competitive underwriting, applicable to every primary dealer, include Rs 72 crore, Rs 334 crore and Rs 215 crore each, for three securities at different interest rates.
The underwriting auction will be conducted through multiple price-based methods on September 3. Primary dealers may submit their bids for ACU auction electronically through core banking solution (E-Kuber) system of the RBI between 9 AM and 9:30 AM on the date of the underwriting auction.
The central bank also conducted conduct an open market purchase of government securities of Rs 25,000 crore last week under its G-sec Acquisition Programme (G-SAP 2.0). G-SAP is an unstructured and unconditional purchase of government bonds by RBI from market players.
The Reserve Bank purchased these government securities through a multi-security auction using the multiple price method. During the July-September quarter, the RBI would buy bonds worth 1.2 lakh crore from the secondary market under G-SAP 2.0 to maintain liquidity in the economy and hold government bond yields low. The move will help the central bank in calming yields and controlling excessive volatility faced by market participants in the government securities market.
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