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124 Economic Survey 2021-22

Figure 7: Policy Corridor and WACR

5.0
4.5

4.0
per cent 3.5

3.0

2.5
2.0

1.5
Mar 30, 20 Apr 30, 20 May 31, 20 Jun 30, 20 Jul 31, 20 Aug 31, 20 Sep 30, 20 Oct 31, 20 Nov 30, 20 Dec 31, 20 Jan 31, 21 Feb 28, 21 Mar 31, 21 Apr 30, 21 May 31, 21 Jun 30, 21 Jul 31, 21 Aug 31, 21 Sep 30, 21 Oct 31, 21 Nov 30, 21 Dec 31, 21

WACR Repo Rate Reverse Repo Rate MSF Rate

Source: RBI and CCIL

DEVELOPMENTS IN G-SEC MARKET

4.13 The yields on 10-year G sec which had reached 8.2 per cent on 26 September 2018
th
reduced substantially to reach 5.75 per cent in June 2020. It has since then increased to stand at
6.45 per cent as on 31 December 2021.
st
Figure 8: India 10-Year Generic G-Sec Yield

8.5
8.0

7.5

per cent 7.0
6.5

6.0

5.5
5.0
1/1/2017 3/1/2017 5/1/2017 7/1/2017 9/1/2017 11/1/2017 1/1/2018 3/1/2018 5/1/2018 7/1/2018 9/1/2018 11/1/2018 1/1/2019 3/1/2019 5/1/2019 7/1/2019 9/1/2019 11/1/2019 1/1/2020 3/1/2020 5/1/2020 7/1/2020 9/1/2020 11/1/2020 1/1/2021 3/1/2021 5/1/2021 7/1/2021 9/1/2021 11/1/2021 1/1/2022

Source: Bloomberg
4.14 Trading in the 10-year G-sec started on a positive note in the financial year 2021-22 (Figure
8), supported by the Reserve Bank’s G-SAP, continued accommodative stance domestically and
dovish monetary policy stance adopted by major economies around the world. In the beginning
of first quarter (Q1) of 2021-22, yield on 10-year G-Secs stood at around 6.26 per cent. The 10-
year yield reached a low of 5.96 per cent (intra day) in May 2021. The announcement of G-SAP
2.0 amounting to `1.2 lakh crore on 4 June 2021 and the US federal open market committee’s
th