Open Market Operation (OMO)

  • On 6th March 2025, the Reserve Bank decided to inject Rs. 1.9 lakh crore into the banking system through open market operations of government securities and USD/INR swaps.
  • OMOs refer to a central bank selling or purchasing securities in the open market.
  • It is a monetary policy tool to rein in inflation and money supply in the system.
  • When the RBI feels that there is excess liquidity in the market, it resorts to the sale of government securities, thereby sucking out the rupee liquidity.
  • Selling securities removes money from the system, raises interest rates, makes loans more expensive, ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content
Buy May 2025 Issue

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material before the last six months of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber

Related Content

News Snippets