In the context of the Indian economy, 'Open Market Operations' refer to which of the following?

💡 Solution & Explanation

Open Market Operations refer to the deliberate purchase and sale of government securities by the Reserve Bank of India to regulate liquidity conditions in the commercial banking system. When the central bank wants to expand money supply, it purchases securities, injecting cash into the economy, and vice versa when it sells securities. This monetary policy instrument helps manage inflation and stabilize short-term interest rates.