monetary operations

Why Does RBI Conduct OMO?

by

Why Does RBI Conduct OMO? Open market operations, or OMOs, are the purchase and sale of G-Secs by the Reserve Bank of India (RBI) on the Centre’s behalf to streamline money supply and interest rates. In case of excess liquidity in the market, RBI issues these securities via auctions, Mint explains. Why is OMO done?

How Do Open Market Operations Affect Interest Rates?

by

How Do Open Market Operations Affect Interest Rates? Open market purchases raise bond prices, and open market sales lower bond prices. When the Federal Reserve buys bonds, bond prices go up, which in turn reduces interest rates. Open market purchases increase the money supply, which makes money less valuable and reduces the interest rate in