Mumbai: To pump up liquidity in the financial system, the Reserve Bank of India will conduct special ‘Open Market Operations (OMO) on July 2. Also Read - Bank Holiday Alert! Banks to Remain Shut For 12 Days in May 2021 | Check State-wise Full List

The special OMO session will see simultaneous purchase and sale of government securities for Rs 10,000 crore. Also Read - 'India Was on Verge of Defeating COVID-19 But...' NITI Aayog Official Says Second Wave Hurting Economy

The operation is likened to the Federal Reserve’s ‘operational twist’ — which involved swapping short-term treasury securities for long-term government debts conducted in 2011-12. Also Read - Are You Saving Money By Putting in Savings Account? Actually NOT

Under its OMO operations, RBI will sell short-term securities worth Rs 10,000 crore maturing in the current band next year and purchase long-term securities of an equal amount maturing between 2027 and 2033.

The move is expected to improve both liquidity and bond yields.