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Operation Twist
April 30 , 2020
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- The Reserve bank of India has decided to bring back its bond swapping programme.
- It is billed as India’s Operation Twist with an aim to help monetary transmission.
- The RBI said that it will conduct purchase and sale of government securities under open market operations (OMO) for Rs10,000 crore.
- ‘Operation Twist’ is RBI’s simultaneous selling of short-term securities and buying of long term securities through open market operations (OMO).
- Under this mechanism, the short-term securities are transitioned into long-term securities.
- The RBI manages and controls the liquidity, rupee strength and monetary management through purchase and sale of government securities (G-Secs) in a monetary tool called Open market Operations.
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