Mumbai, June 30 -- The Reserve Bank of India (RBI) on Thursday said it will simultaneously buy and sell government bonds, along the lines of the Federal Reserve's Operation Twist, in a bid to lower interest rates on long-term government bonds.

The central bank said that it will conduct the bond-swapping programme under open market operations (OMOs) for 10,000 crore each on July 2. Typically, the central bank conducts OMO sales to drain liquidity in the financial system and OMO purchases to infuse liquidity. As part of the programme, RBI will purchase securities with tenures between 7 and 13 years, and sell short-dated securities maturing in October and April. The benchmark 10-year bond yield dropped 12 basis points to 5.90% on Monday. RBI'...