scorecardresearchWhat are RBI's open market operations? An explainer

What are RBI's open market operations? An explainer

Updated: 16 Dec 2021, 09:45 AM IST
TL;DR.
A part of the Reserve Bank of India’s (RBI) monetary policy arsenal, open market operations regulate the flow of money in the market by buying or selling of government securities. Let us decode this
When the RBI wants to inject liquidity into the system, it buys the government securities. On the other hand, when it wants to absorb liquidity from the market, it sells the securities.

When the RBI wants to inject liquidity into the system, it buys the government securities. On the other hand, when it wants to absorb liquidity from the market, it sells the securities.