What is Operation Twist? Discuss its impact on the banking sector in India.
Approach of the Answer
- Introduction: Tell about Operation Twist and its history.
- Body: Need of Operation Twist and its impact.
- Conclusion: Conclude by summarizing your answer.
Operation twist is a programme adopted by the central bank (RBI in India) for quantitative easing. In this operation, the RBI regularly buys and sells government securities (G-Secs), essentially loans to the Indian government, of varying maturities as part of its monetary management
- Operation Twist was first used in 1961 by the US Federal Reserve (central bank) as a way to strengthen the U.S. dollar and stimulate cash flow into the economy.
- RBI announced to carry out US-style ....
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