IAS PRELIMS CHALLENGE SERIES – 29 JUNE 2021

Q. Recently, the RBI has launched a Government Securities Acquisition Programme (G-SAP). Which of the statement(s) about this programme is/are In-Correct?

1) The RBI will purchase government securities under G-SAP.
2) The RBI will sell and purchase government securities under G-SAP.
3) The RBI will sell government securities under G-SAP.

Choose the correct option:

A. 1 only
B. 2and 3 only
C. 1 and 3only
D. None of the statements are incorrect

Ans. (A)

Explanation:

Statement-1: RBI will commit to a specific amount of open market purchases of government securities under G-SAP. For the first quarter of the financial year 2021-22, RBI will conduct a G-SAP of Rs 1 lakh crore. The aim is to ensure stable financial conditions for the economic recovery to accelerate. Hence only Statement-1 is Correct and Statement-2 and Statement-3 are Incorrect. Since only statement-1 is correct thus, correct answer choice is (A)