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Question : ____________refers to the sale and purchase of government securities by RBI in the open market to influence liquidity in the economy in the medium term.

Option 1: Marginal Standing Facility

Option 2: Credit Ceiling

Option 3: Open Market Operations

Option 4: Liquidity Adjustment Facility


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Open Market Operations


Solution : The correct answer is Open Market Operations .

The central bank uses open market operations (OMOs) as a tool of monetary policy to manage the amount of money in the economy by buying and selling assets on the open market. The central bank extracts liquidity from the economy by selling the securities and releases it by purchasing the securities.

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