Op Twist: Banks’ offer to sell 6.3 times the ₹10,000-crore notified amount of G-Secs to RBI

Banks on Thursday offered to sell three Government Securities (G-Sec) aggregating ₹63,012 crore to the Reserve Bank of India (RBI) against the notified amount of ₹10,000 crore at the first special Open Market Operation (OMO) — simultaneous purchase and sale auction of G-Secs — of FY22.

Of the three G-Secs the RBI intended to purchase under OMO Purchase and Sale (Operation Twist), it accepted offers aggregating ₹10,000 crore only for the benchmark 2030 G-Sec (coupon rate: 5.85 per cent).

The central bank jad rejected all the offers it received for the 2026 G-Sec (6.97 per cent) and 2028 G-Sec (7.17 per cent).

RBI set the cut-off price for the purchase of the 2030 G-Sec at ₹99.10 (previous closing price: ₹99.07), with the cut-off yield coming in at 5.9742 per cent (5.9783 per cent).

The central bank received bids aggregating ₹36,471 crore at the sale of two 182 day Treasury Bills under the Operation Twist against the notified amount of ₹10,000 crore. It accepted bids for the notified amount.

Under Operation Twist, RBI simultaneously buys long-term G-Secs and sells Treasury Bills to lower longer-term interest rates.

G-Sec prices moved in a narrow band in the secondary market as auction of four G-Secs aggregating ₹32,000 crore is scheduled on May 7.

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