- Toforcefully bring down the rate of interest in the economy, the RBI would buy Government Securities (G-Secs) with a 10- years maturity while, at the same time, sell government bonds with just one-year maturity both worth ₹. 10,000 crore each.
- Globally termed as ‘Operation Twist’for quite sometime, economics have been expectating the Central bank to launch this special manoeuvre so that rate cuts by it could lead to a commensurate drop in the rate of interest in the economy.
‘Operation Twist’ is the name given to a monetary policy tool that the Jerome Powell– led US Federal Reserve had started to influence the rate of interest in the world’s largest economy. The process involves buying and selling of both short-and long-term government bonds- depending upon its objective relating to rates-at the same time.
