Today’s Current Affairs: RBI repurchases Rs 2,069 crore worth of government bonds, falling short of the notified Rs 60,000 crore target. Banks refused to sell securities at a loss, resulting in only a small amount being accepted for buyback. The securities included 6.18%, 9.15%, and 6.89% Government Securities maturing in 2024 and 2025. Follow our WhatsApp channel for more updates.
The securities scheduled for buyback were:
- 6.18 per cent 2024
- 9.15 per cent Government Securities (GS) 2024
- 6.89 per cent GS 2025
- None of the above
Answer: 6.18 per cent 2024, 9.15 per cent Government Securities (GS) 2024, and 6.89 per cent GS 2025.
What were the securities scheduled for buyback?
The securities scheduled for buyback were the 6.18 per cent 2024, 9.15 per cent Government Securities (GS) 2024, and 6.89 per cent GS 2025.
How much did the RBI repurchase in government bonds?
The Reserve Bank of India (RBI) repurchased Rs 2,069 crore worth of government bonds, against the notified amount of Rs 60,000 crore.
Why did the RBI accept only a small amount during the buyback?
The RBI accepted only a small amount during the buyback because most of the securities were bought at higher prices during the COVID-19 pandemic, and the RBI was not willing to pay those high levels.
What were the outcomes of the buyback for each security?
For the 6.18 per cent GS securities, the RBI accepted only six bids amounting to Rs 552.999 crore at a cut-off price of Rs 99.61. For the 9.15 per cent GS, it accepted two bids worth Rs 1,513 crore at a cut-off price of Rs 100.98. Only one bid worth Rs 4 crore was accepted for the 6.89 per cent GS 2025 at a cut-off price of Rs 99.86.
What was the significance of the previous buyback auction on May 9?
At the previous buyback auction on May 9, the RBI repurchased Rs 10,512 crore worth of government bonds, significantly less than the announced amount of Rs 40,000 crore. Market participants noted that the RBI accepted bids only at Financial Benchmarks India Private Limited (FBIL) levels.
Today's Current Affairs highlight the Reserve Bank of India's (RBI) decision to repurchase government bonds worth Rs 2,069 crore, against the notified amount of Rs 60,000 crore. Market participants revealed that banks were reluctant to sell the securities at a loss, as they were purchased at higher prices during the COVID-19 pandemic. The securities scheduled for buyback included the 6.18 per cent 2024, 9.15 per cent Government Securities (GS) 2024, and 6.89 per cent GS 2025. Despite receiving offers totalling Rs 26,877.161 crore, the RBI accepted only a small amount, signaling a cautious approach. This buyback follows a previous auction on May 9, where the RBI repurchased Rs 10,512.993 crore worth of government bonds, less than the announced amount of Rs 40,000 crore. Market experts anticipate banks demanding fair prices for the bonds in future buyback auctions, considering the high purchase prices of these securities.
