Reserve Bank of India Governor Shaktikanta Das.
The Central bank also announced G-SAP 2.0 which will help in calming yields and control undue volatility faced by market participants in the government securities market.
Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said India’s forex reserves may have crossed record level of $600 billion on the back of robust capital flows.
As per the RBI’s data issued on May 28, the country’s foreign exchange reserves rose by $2.865 billion to a record high of $592.894 billion for the week ended May 21, boosted by gold and currency assets.
“Based on the current estimation, we believe that our forex reserves may have crossed $600 billion,” he said while announcing the bi-monthly monetary policy review.
RBI Governor Shaktikanta Das. File
| Photo Credit: The Hindu
“The specific dates and securities under G-SAP 2.0 operations will be indicated separately,” RBI Governor Shaktikanta Das said. The Reserve Bank of India (RBI) has decided to conduct another operation under G-SAP 1.0 for purchase of G-Secs of ₹40,000 crore on June 17, 2021. Of this, ₹10,000 crore would constitute purchase of State Development Loans (SDLs).
It has also been decided to undertake G-SAP 2.0 in Q2:2021-22 and conduct secondary market purchase operations of ₹1.20 lakh crore to support the market. “The specific dates and securities under G-SAP 2.0 operations will be indicated separately. We do expect the market to respond appropriately to this announcement of G-SAP,” RBI Governor Shaktikanta Das said.
If growth recovery gets back on track as Covid-19 infections decline, focus may shift to policy normalisation. Fund managers say RBI has already exhausted monetary policy options to support growth and any further reduction in policy rates is unlikely