DAS' STRAIGHT TALK: Op Twist to lower corporate bond yields

Mumbai: The Reserve Bank of India’s ‘Operation Twist’ is to ensure better monetary transmission especially in the corporate bond market, governor Shaktikanta Das said at the post-policy interaction with the media.

“Operation Twist is an instrument used to ensure better monetary policy transmission. The corporate bonds are benchmarked to the lending rates in the Gsec segment. By Operation Twist if we are able to soften the yields on government securities at the longer end like 10-year Gsec, then that acts as a benchmark for corporate loan rates,” Das said.

“The efforts were mainly to ensure better policy transmission into the corporate bond market and not so much to manage the yield on GSecs. How far we will go will depend on the evolving situation,” Das added.


Since December, the RBI has been buying long-term government bonds while simultaneously selling short term ones with the intention to moderate high long-term interest rates and bring them closer to the repo rate.