RBI announces ~10,000-crore Operation Twist

The RBI said it would be conducting special open market operations (OMO) in government bonds worth ~10,000 crore on Thursday, keeping in mind the evolving liquidity situations at banks. The RBI will sell bonds maturing between October 15, 2020, and April 29, 2021, and buy bonds maturing between May 15, 2027, and December 5, 2033. These OMOS, called Operation Twist in market parlance, are a way to soften long-term bond yields that help the government borrow cheap. Besides, such OMOS give the RBI enough long-term bonds to support its liquidity operations. The RBI has, in the recent past, done such operations a number of times. In this financial year, the RBI is doing such Operation Twist for a second time.