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What does the open market operations of the RBI mean?
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- Buying and selling shares
- Auctioning of foreign exchange
- Trading in securities
- Transactions in gold
- Buying and selling shares
Correct Option: C
An open market operation (also known as OMO) is an activity by a central bank to buy or sell government bonds on the open market. A central bank uses them as the primary means of implementing monetary policy. The usual aim of open market operations is to control the short term interest rate and the supply of base money in an economy, and thus indirectly control the total money supply.