The Reserve Bank of India (RBI) announced that it will purchase 4 government securities (G-Secs) worth 20,000 crore rupees. The central bank will purchase the product based on Open Market Operations (OMOs) on February 10, 2021.
♦ The move was announced after the yield rose to a recent intraday high of 6.1634%. The Reserve Bank of India is worried about the higher government borrowing.
♦ After the announcement of the OMO purchase, the yield of the benchmark 10-year G-Sec dropped by 3-4 basis points. Now, its coupon rate is 5.77%, compared with the previous closing yield of 6.1283%.