20(Operation Twist) Flashcards
1
Q
Is it operation by USA fedral bank
A
Yes….It was the operation used by USA during 2008 crisis to pull back its economy
2
Q
why in news
A
India now wants to use the same and thus RBI wants to implement it
3
Q
Is it a LAF(Liquidity Adjustment facility) operation
A
Nope its a OMO(Open Market Operation)
4
Q
How it will work
A
1 RBI will purchase long term govt bonds of worth 10 KCr with maturity period of 10 years(2029).
2 RBI will sell the same 10 KCr with maturity period of 1 year (2020)
This dual operation will induce money
