Open Market Operation is a part of

BANKING GENERAL KNOWLEDGE

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

‘Open Market Operation’ is a part of

A	Income Policy
B	Fiscal Policy
C	Credit Policy
D	Labour Policy

Explanation:

Detailed explanation-1: -Open market operations are one of three tools used by the Fed to affect the availability of money and credit. The term refers to a central bank buying or selling securities in the open market to influence the money supply.

Detailed explanation-2: -Open market operations (OMOs)–the purchase and sale of securities in the open market by a central bank–are a key tool used by the Federal Reserve in the implementation of monetary policy. The short-term objective for open market operations is specified by the Federal Open Market Committee (FOMC).

Detailed explanation-3: -Open market operations as an instrument of credit control are performed by RBI.

Detailed explanation-4: -One of the Quantitative Tools: OMO is one of the quantitative tools that RBI uses to smoothen the liquidity conditions through the year and minimise its impact on the interest rate and inflation rate levels.

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