Sunday, March 27, 2016

RBI changes g-sec tenures under OMO to rein in yield

With an aim to maintain liquidity and also keep rising yields in the market under check, the Reserve Bank of India (RBI) is changing the profile of the government securities (Gsecs), it is buying from bond investors under its open market operations (OMOs).
  • A bond issued by a government authority, with a promise of repayment upon maturity that is backed by government
  • An open market operation refers to a monetary policy tool in which central banks buy and sell bonds to regulate the money supply in the economy.

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