Reserve Bank of India Governor has informed that the market’s reaction to Operation Twist was on expected lines.
Operation Twist
- The simultaneous buy-sell of government bonds, known as Operation Twist, was conducted to bring down long-term interest rate while allowing short term rates to inch up.
- The move was aimed at addressing liquidity, which is assymetric — abundant at the shorter end but not on the longer end. The move will help in monetary transmission.
- The central bank has so far carried out three rounds of simultaneous bond buy-and-sell via open market operations.
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