RBIs open market operation transactions are carried out with a view to regulate

BANKING GENERAL KNOWLEDGE

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

RBI’s open market operation transactions are carried out with a view to regulate

A	liquidity in the economy
B	prices of essential commodities conflation
C	borrowing power of the banks
D	All of the above

Explanation:

Detailed explanation-1: -Open market operation transactions are done by RBI to regulate both inflation and money supply.

Detailed explanation-2: -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-3: -In order to control money supply, the RBI buys and sells government securities in the open market. These operations conducted by the Central Bank in the open market are referred to as Open Market Operations.

There is 1 question to complete.