Open Market Operations are a Monetary Policy Tool Used by?

  1. Commodity Exchange of India
  2. Life Insurance Corporation
  3. Stock Exchange of India
  4. Reserve Bank of India


Monis Rasool Professor Asked on 26th May 2015 in Economics.
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  • 1 Answer(s)

    Option 4 is the right answer.

    An open market operation (OMO) is an activity by a central bank to buy or sell government bonds on the open market. A central bank uses them as the primary means of implementing monetary policy. The usual aim of open market operations is to manipulate the short-term interest rate and the supply of base money in an economy.
    Thus Reserve Bank of India, being the central bank of the country, has to make policies and use instruments accordingly

    Harsh Vardhan Professor Answered on 28th May 2015.
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