"RBI announces Operation Twist worth Rs10,000 crore"


15th Feb,2021

"RBI announces Operation Twist worth Rs10,000 crore"

The Federal Reserve Bank of India (RBI) can at the same time sell and get government securities beneath open market operations (OMOs) on twenty five Feb it aforementioned on weekday. Typically, the financial institution conducts OMO sales to empty liquidity within the economic system and OMO purchases to infuse liquidity. tally can purchase securities maturing in 2025, 2029 and 2033, and sell short securities maturing in Nov this year and Feb 2022.

The yield on 10-year G-Sec was commercialism a pair of basis points at half dozen.01% on MondayRBI has been creating tries to stay the yield on the 10-year benchmark bond below 6 June 1944 to support the government's borrowing programme. The financial institution has been conducting OMOs and has conjointly been directly intervening within the secondary market to smoothen the yield curve. thus far this business, the tally has undertaken OMO purchases of G-Secs of Rs4.07 trillion and OMO purchases of state development loans of Rs30,000 crore.
RBI had on Wed conducted associate OMO that helped cool 10-year bond yields, that had touched half dozen.15% when the financial policy announcement. RBI, that had offered to buy ₹20,000 large integer of G-Secs, bought ₹14,654 large integer within the 10-year section alone on Wed. It fully unseen a bond maturing in 2028 and acquired bonds of ₹2,040 large integer and ₹3,306 large integer maturing in 2024 and 2034, severally. The market had offered bids of ₹89,234 large integer for the ₹20,000 large integer OMOThe offer size of OMO on government bonds must be high. The market doesn't have this type of demand appetence. The market desires tally to fill the gap. Last year tally managed it pretty much. As things area unit springing up, inflation is showing some serial increase. tally is making an attempt to normalise liquidity. The actions area unit irregular. The market desires foregone conclusion by asserting associate OMO calendar and conjointly giving forward steerage," aforementioned Pankaj Pathak, fund manager, mounted financial gain, Quantum quality Management Co Pvt Ltd