OMO

  • August 26, 2020
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Subject: Economy

Context:

The Reserve Bank of India announced that it will conduct open market operations or OMO of government t securities worth ₹20,000 crore in two tranches.

Concept:

  • Open market operation is the sale and purchase of government securities and treasury bills by RBI without printing new currency.
  • Open market operation is a tool that the RBI uses to smoothen liquidity conditions through the year and regulate money supply in the economy.
  • RBI carries out the OMO through commercial banks and does not directly deal with the public.
economy OMO