Government Security Acquisition Programme (G-SAP) 1.0

Question 1

Context

Answer 1

G-SAP put in place by RBI

Question 2

What?

Answer 2

RBI will purchase government bonds of worth Rs 1 trillion under this -> yachyamule market madhe money availability vadhel

G-SAP will almost serve the purpose of an OMO calendar

Question 3

What is OMO?

Answer 3

• Open market operations is the sale and purchase of government securities and treasury bills by RBI -> to regulate the money supply
• It’s quantitative monetary policy tools.

Question 4

OMO & liquidity

Answer 4

wants to infuse liquidity -> buy government securities in the open market

reduce liquidity -> it sells securities

Question 5

PEMO vs REPO?

Answer 5

Outright Purchase (PEMO) : permanent buying/selling of government securities

Repurchase Agreement (REPO) – this is short-term and are subject to repurchase.