CURRENT AFFAIRS

Detailed explanation-1: -Operation twist is a mechanism under which the Reserve Bank of India does simultaneous buying and selling of government securities (both short-term and long-term government securities) through open market operations (OMO).

Detailed explanation-2: -Operation Twist is a monetary policy of the central banks used to bring down interest rates and control investments in a country. RBI deployed this policy in India in 2019 and 2020. Under this operation, the RBI twisted the yield of government securities to bring liquidity into the markets.

Detailed explanation-3: -Key Takeaways. Operation Twist is a monetary policy strategy used by central banks aimed at stimulating economic growth through lowering long-term interest rates. This is achieved by selling near-term Treasuries to buy longer-dated ones.

Detailed explanation-4: -Open market operations. Buying and selling of government securities by the central bank from or to the public and banks are known as open market operations. It is an instrument of credit control which was used later when the bank rate policy was found ineffective.

Detailed explanation-5: -Open market operation (OMO) is the process by which the central bank purchases (sells) government securities (G-secs) or other financial assets from (to) banks and financial institutions. In a modern market-based financial system, central banks use OMOs as one of the tools for implementing monetary policy.