OPERATION TWIST

Dec. 21, 2019

The Reserve Bank of India (RBI) has decided to conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for ₹10,000 crores each on December 23, 2019.

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It is the first time the RBI will conduct a special open market operation (OMO) of this kind, similar to the 'Operation Twist' carried out in the United States near the start of the decade.
The RBI said it will buy 100 billion rupees' ($1.4 billion) worth of the current benchmark 10-year bond while selling four bonds maturing in 2020 for an equivalent amount.
RBI has decided to conduct the special OMO after reviewing the liquidity & market situation and assessing financial conditions. Bond yields have been rising since the RBI unexpectedly left its key repo rate unchanged earlier this month.
Analysts believe this ‘Operation Twist’ is aimed at bringing longer term yields lower.

Source : Economic Times