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RBI to conduct simultaneous purchase, sale of govt securities under OMO for Rs 10,000 crore each

25 Sep 2020 Evaluate

The Reserve Bank of India (RBI) has said it will conduct simultaneous purchase and sale of government securities under open market operation (OMO) for an aggregate amount of Rs 10,000 crore each on October 1, 2020 on a review of the current liquidity and financial conditions.

The RBI further said it will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly functioning of financial markets. On October 1, the RBI would purchase three securities totalling Rs 10,000 crore and selling two securities of the same amount. The result of the auctions will be announced on the same day.

Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Secs of longer maturities and selling equal amount of G-Secs of shorter maturities. Besides, the RBI said it reserves the right to decide on the quantum of purchase and sale of individual securities.

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