Government Security Acquisition Programme (G-SAP) 1.0 Flashcards

1
Q

Context

A

G-SAP put in place by RBI

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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

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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.
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4
Q

OMO & liquidity

A

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

reduce liquidity -> it sells securities

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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.

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