The Reserve Bank of India (RBI) has decided to conduct simultaneous purchase of Government Securities (G-Secs), maturing between 2027 and 2031, and sale of 182 day and 364 day treasury bills (DTBs) under Open Market Operations (OMO) for ₹10,000 crore each on July 2.

The decision to conduct special OMO follows review of current and evolving liquidity and market conditions, the RBI said in a statement.

Specifically, the central bank will be purchasing four G-Secs or GS – 6.79 per cent GS 2027; 7.26 per cent GS 2029; 6.68 per cent GS 2031; and 6.57 per cent GS 2033 – using the multiple price auction method aggregating ₹10,000 crore. The RBI said there is no security-wise notified amount.

The RBI will be selling four DTBs – two 182 DTBs maturing on October 15 and October 22, 2020; and two 364 DTBs maturing on April 22 and April 29, 2021. The RBI said there is no security-wise notified amount.

Marzban Irani, CIO-Fixed Income, LIC Mutual Fund, said: “In the first quarter, lot of G-Sec matured. So, G-Secs were maturing and market players were buying in the auction.

“As we go into July, maturities of G-Secs are not there. There will be pressure on yields. So, the RBI has announced this (‘Operation Twist’) to ease the pressure.”

Irani observed that the main purpose of the OMO is to bring down the yields at the longer end.

Published on June 29, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill.

In these difficult times, we, at BusinessLine, are trying our best to ensure the newspaper reaches your hands every day. You can also access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all our readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. You can help us by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section.

Our subscriptions start as low as Rs 199/- per month. A yearly package costs just Rs. 999 – a mere Rs 2.75 per day, less than a third the price of a cup of roadside chai..

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism