{"id":2259,"date":"2019-06-21T08:16:13","date_gmt":"2019-06-21T08:16:13","guid":{"rendered":"https:\/\/www.gkseries.com\/blog\/?p=2259"},"modified":"2019-06-21T08:16:14","modified_gmt":"2019-06-21T08:16:14","slug":"rbi-to-infuse-rs-15000-crore-into-financial-system-through-the-purchase-of-government-bonds","status":"publish","type":"post","link":"https:\/\/www.gkseries.com\/blog\/rbi-to-infuse-rs-15000-crore-into-financial-system-through-the-purchase-of-government-bonds\/","title":{"rendered":"RBI to infuse Rs.15,000 crore into financial system through the purchase of government bonds"},"content":{"rendered":"\n<p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\nThe&nbsp;<strong>Reserve\nBank of India<\/strong>&nbsp;is to infuse&nbsp;<strong>Rs.15,000 crore<\/strong>&nbsp;into\nthe financial system through bond purchases on June 13.<br><br><strong>Why\nthe infusion:<\/strong><br>\nRBI made the decision after assessing of<strong>&nbsp;prevailing liquidity\nconditions&nbsp;<\/strong>and also of the durable liquidity needs that\nare going forward.&nbsp;<br>\nRBI uses<strong>&nbsp;Open\nMarket Operations (OMO)<\/strong>&nbsp;for injecting liquidity<strong>&nbsp;into the system<\/strong>&nbsp;through\nthe purchase of&nbsp;<strong>government\nbonds (G-sec)<\/strong>. Therefore, RBI is to conduct the purchase\nof&nbsp;&nbsp;<strong>six&nbsp;<\/strong>G-sec\nunder<strong>&nbsp;OMOs<\/strong>&nbsp;through&nbsp;<strong>multi-security auction&nbsp;<\/strong>using\nmultiple price method.<br><br><strong>What\nis G-Sec?<\/strong><br>\nA government security (G-Sec) is a debt\nobligation of the Indian government to fund their<strong>&nbsp;fiscal deficit.<\/strong>The\nsecurities are tradable. G-sec is &nbsp;issued either by the&nbsp;<strong>central or the state government<\/strong>.\nThey are offered for short term as well as long term.<br><br><strong>Multiple\nprice-auction<\/strong><br>\nIn a multiple price-auction each successful\nbidder should pay the price stated bu the player himself. But, in case of\nuniform price auctions, all successful bidders should pay the cut-off price,\nthat is, the same price at which the market clears the issue.<br><br><strong>Open\nMarket Operations:<\/strong><br>\nOpen market operations (OMO) refers to the&nbsp;<strong>buying and selling of government securities<\/strong>&nbsp;by\nthe central bank, RBI in case of India, in the open market in order to&nbsp;<strong>contract or expand the amount of money\nin the banking system<\/strong>. The purchase of the securities will\ninject money into the banking system and stimulate growth, while sales of\nsecurities do the opposite and contract the economy.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The&nbsp;Reserve Bank of India&nbsp;is to infuse&nbsp;Rs.15,000 crore&nbsp;into the financial system through bond purchases on June 13. Why the infusion: RBI made the decision after assessing of&nbsp;prevailing liquidity conditions&nbsp;and also of the durable liquidity needs that are going forward.&nbsp; RBI uses&nbsp;Open Market Operations (OMO)&nbsp;for injecting liquidity&nbsp;into the system&nbsp;through the purchase of&nbsp;government bonds (G-sec). Therefore, RBI is [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":2260,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[45],"tags":[],"class_list":["post-2259","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs-articles"],"_links":{"self":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/comments?post=2259"}],"version-history":[{"count":1,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2259\/revisions"}],"predecessor-version":[{"id":2261,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2259\/revisions\/2261"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media\/2260"}],"wp:attachment":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media?parent=2259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/categories?post=2259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/tags?post=2259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}