India's banking regulator, the Reserve Bank of India (RBI) has announced open market operations (OMO) worth $2.6 billion.
OMO are a tool to manage liquidity in the financial system via the purchase or sale of government bonds.
An RBI communiqué on Tuesday stated that the bank will conduct the OMO on 27 August and 3 September.
"On a review of current and evolving liquidity and market conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of government securities under OMO for an aggregate amount of $2.66 billion in two tranches of $1.33 billion each,” the bank said.
Under simultaneous OMO, also known as an "operation twist", the RBI will buy long-term bonds and sell short-term bonds simultaneously in order to ensure it has adequate liquidity to support the economy through a period of enhanced lending.
