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Discussion

In context of Indian economy , ‘Open Market Operations’ refers to?

  • A.Borrowing by Scheduled banks from RBI.
  • B.Lending by commercial banks to industry and trade.
  • C.Purchase and sale of govt securities by the RBI.
  • D.None of the above.

Answer: C

Purchase and sale of govt securities by RBI. OMOs are conducted by the RBI via the sale/purchase of government securities (G-Sec) to/from the market with the primary aim of modulating rupee liquidity conditions in the market.

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