RBI to conduct simultaneous sale-purchase of govt securities next week

Simultaneous purchase and sale of G-sec under OMOs, popularly known as Operation Twist, involves purchasing the securities of longer maturities and selling an equal value of securities of shorter maturities.

Written by PTI

December 31, 2020 19:23 IST

Reserve Bank of India (RBI) said it will allow retail investors to directly buy government debt, making India the first Asian country to do so

The RBI on Thursday announced it will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) for Rs 10,000 crore each on January 7, 2021

The decision was taken after a review of current liquidity and financial conditions, the Reserve Bank said in a statement.

Simultaneous purchase and sale of G-sec under OMOs, popularly known as Operation Twist, involves purchasing the securities of longer maturities and selling an equal value of securities of shorter maturities.

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On January 7, the RBI will purchase three government securities (G-Sec) of different maturity dates aggregating to Rs 10,000 crore and sell two securities aggregating to the same amount using the multiple price auction method.

The RBI further said it reserves the right to decide on the quantum of purchase/sale of the securities.

The result of the auctions will be announced on the same day.