RBI to conduct LTROs on February 17 and 24

Mumbai: The Reserve Bank of India said on Friday it has decided to conduct Long Term Repo Operations (LTROs) for one-year and three-year tenors for up to a total amount of Rs 1,00,000 crore at the policy repo rate.

It will conduct 3-year LTROs with a notified amount of Rs 25,000 crore which will be held on February 17, and 1-year LTROs with Rs 25,000 crore which will be held on February 24.

On Thursday, RBI introduced LTROs as one more tool after the “Operation Twist” to enable better monetary policy transmission. The central bank said it introduced LTROs with a view of assuring banks about the availability of durable liquidity at reasonable cost relative to prevailing market conditions, and to further encourage banks to undertake maturity transformation smoothly and seamlessly so as to augment credit flows to productive sectors.


It is a measure that market participants expect will bring down short-term rates and also boost investment in corporate bonds. These new measures, coupled with RBI’s earlier introduced ‘Operation Twist’, are an attempt by the central bank to manage bond yields and push transmission of earlier rate cuts.