Open market operation as an instrument of credit control are performed by

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Central bank of country
B	the commercial bank pof country
C	Both a and b
D	none of these

Explanation:

Detailed explanation-1: -Open market operations as an instrument of credit control are performed by RBI.

Detailed explanation-2: -Open market operations work by selling and buying government securities by the central bank of a nation. To increase the money supply, the central bank buys back securities, while to reduce the money supply it sells securities to the commercial banks.

Detailed explanation-3: -Understanding Open Market Operations (OMOs) The U.S. central bank can lower the interest rate by purchasing securities (and injecting money into the money supply). Similarly, it can sell securities from its balance sheet, take money out of circulation, and put upward pressure on interest rates.

Detailed explanation-4: -The different instruments of credit control used by the Reserve Bank of India are Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), the Bank Rate Policy, Selective Credit Control (SCC), Open Market Operations (OMOs).

Detailed explanation-5: -Open market operations are the main monetary policy instrument, through which the central bank buys or sells securities with financial institutions in the open markets, thereby influencing the amount of money in circulation and/or interest rates.

There is 1 question to complete.