Mumbai, June 29: To pump up liquidity in the financial system, the Reserve Bank of India will conduct special ‘Open Market Operations (OMO) on July 2. The special OMO session will see simultaneous purchase and sale of government securities for Rs 10,000 crore.

The operation is likened to the Federal Reserve's 'operational twist' -- which involved swapping short-term treasury securities for long-term government debts conducted in 2011-12. COVID-19 Impact: RBI May Opt for Loan Recast for Select Sectors.

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Under its OMO operations, RBI will sell short-term securities worth Rs 10,000 crore maturing in the current band next year and purchase long-term securities of an equal amount maturing between 2027 and 2033. The move is expected to improve both liquidity and bond yields.

(The above story first appeared on LatestLY on Jun 29, 2020 06:23 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).