BANKING AFFAIRS

Detailed explanation-1: -open-market operation, any of the purchases and sales of government securities and sometimes commercial paper by the central banking authority for the purpose of regulating the money supply and credit conditions on a continuous basis.

Detailed explanation-2: -In open market operations, the Federal Reserve buys or sells securities on the open market to raise or lower interest rates. They are one of the tools that the Fed has at its disposal to boost or slow down the country’s economic activity.

Detailed explanation-3: -What is open market operations by RBI? Open Market Operations is the simultaneous sale and purchase of government securities and treasury bills by RBI. The objective of OMO is to regulate the money supply in the economy. RBI carries out the OMO through commercial banks and does not directly deal with the public.

Detailed explanation-4: -Key Takeaways. The Federal Reserve buys and sells government securities to control the money supply and interest rates. This activity is called open market operations.