RBI MPC member predicts ‘less severe’ high food inflation
The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) member highlighted that going ahead, as India develops, the problem of high food inflation would be "less severe".
The Reserve Bank on Friday said it will conduct simultaneous purchase and sale of government securities under the Open Market Operations (OMO) for an aggregate amount of Rs 10,000 crore each on December 17.
The decision was taken after a review of the current liquidity and financial conditions, the RBI said in a statement.
Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Secs of longer maturities and selling equal amount of securities of shorter maturities.
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This is designed to exert downward pressure on longer-term interest rates by lowering long-term Treasury yields.
On December 17, the RBI will purchase three government securities of different maturity dates aggregating to Rs 10,000 crore and sell two securities aggregating to the same amount using the multiple price auction method.
The central bank further said it reserves the right to decide on the quantum of purchase/sale of individual securities.
The result of the auctions will be announced on the same day.
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