RBI to conduct simultaneous purchase, sale of government securities for Rs 10,000 crore each under OMOs
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The Reserve Bank of India (RBI) has said it will conduct simultaneous purchase and sale of government securities for Rs 10,000 crore each under Open Market Operations (OMOs) on March 18, 2020. The RBI said the decision was taken after a review of the current liquidity and financial conditions.
The RBI will purchase three government securities of different maturity dates aggregating to Rs 10,000 crore and sell two gilts of the same amount using the multiple price auction method. The result of the auctions will be announced on the same day. The RBI further said it reserves the right to decide on the quantum of purchase/sale of individual securities.
The RBI will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly functioning of financial markets. Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Sec of longer maturities and selling equal amount of G-Sec of shorter maturities.
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