Operation Twist-III: RBI buys and sells bonds worth 10k crore each
Mumbai: At the next particular open market operation in as many weeks, the Reserve Bank of India (RBI) on Monday bought $10,000 crore of three long-term securities while promoting a same amount of three short-term trades.
Although the RBI offered to sell four securities in the auction, it accepted bids . In the present OMO purchase auction, the RBI offered to buy three securities including 10-year benchmark government bond, as against only one bond from the previous two auctions.
It obtained bids worth $ but choose to take only $10,000 crore of bids.
It got 198 bids for 7.32 per cent-2024 but accepted 12 bids and for 7.27 per cent-2026 bonds the RBI received 163 bids and accepted only two bids.
The RBI received 224 bids for 6.45 per cent-2029 safety but approved only 22 bids. It offered to sell four government securities-6.65 per cent- 2020; 7.80 per cent-2020; 8.27 per cent-2020 and 8.12 per cent-2020 through OMO sale. The RBI from the past two OMO sale auctions offered these securities. It received $47,540 crore of bids but approved to sell crore of bids.
In terms of number of bids, the central bank received 26 bids for 6.65 per cent-2020; 40 for 7.80 per cent-2020 and 35 for 8.27 each cent-2020 but approved 7, 3 and 4 bids, respectively.
For 8.12 per cent-2020 bond, it obtained 41 bids but didn’t accept any of them. In the two similar auctions, the RBI had purchased crore and sold $15,326 crore of bonds. These special OMO auctions are similar to the US Federal Reserves’ Operation Twist aimed at faster transmission of policy rates, an analyst said.