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RBI to Carry out US Fed-Style 'Operation Twist' to Bring Down Interest Rates

Professor of Financial Economics and Part-time Value Investor, Transfin.
Dec 20, 2019 1:24 PM 1 min read

What is Operation Twist? Why is the RBI carrying out Operation Twist?



RBI to carry out US Fed-styled 'Operation Twist' to bring down interest rates.

Imitation Is the Best Form of Flattery: In a first, the Reserve Bank of India (RBI) has announced a simultaneous sale and purchase of government bonds under the Open Market Operations mechanism.


The Central Bank said that it will purchase INR100bn of the 6.45%, 2029 bond and simultaneously sell an equal amount of debt maturing in 2020 via an auction on Monday.


The concept is similar to Operation Twist used by the Federal Reserve in 2011-2012 where it had swapped short-term treasury securities for longer-term government debt, which reduced the gap between two- and 10-year yields.


What is ‘Operation Twist’?: Its a concept where the Central Bank uses the proceeds from sale of short-term securities to buy long-term government debt papers, thereby leading to easing of interest rates on the long term papers. Moneycontrol

Government working to decriminalise provision of Companies Act, says PM Modi.

Speaking at an Assocham event today, PM Narendra Modi said that the government is working to decriminalise more provisions of Companies Act in a bid to further facilitate ease of doing business in the country.


He also urged the banking and the corporate sectors to take decisions freely and invest freely. Livemint


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