Finance glossary

What is Open market operations (OMO)?

The RBI's buying and selling of government securities in the market to add or remove money from the banking system.

When the RBI buys bonds, it pays banks cash, increasing liquidity and usually pushing yields down. When it sells bonds, it absorbs cash. OMOs help the RBI keep market interest rates in line with its policy rate.

← All finance terms A–Z

In the news