Government Security Acquisition Programme (G-SAP) 1.0 Flashcards
1
Q
Context
A
G-SAP put in place by RBI
2
Q
What?
A
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
3
Q
What is OMO?
A
- 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.
4
Q
OMO & liquidity
A
wants to infuse liquidity -> buy government securities in the open market
reduce liquidity -> it sells securities
5
Q
PEMO vs REPO?
A
Outright Purchase (PEMO) : permanent buying/selling of government securities
Repurchase Agreement (REPO) – this is short-term and are subject to repurchase.