Context:

• The Reserve Bank of India announced that it will conduct simultaneous purchase and sale of government securities under Open Market Operations (OMO) on March 10.
• The central bank will purchase four government securities of different maturity dates aggregating to Rs. 20,000 crore and sell three securities aggregating to Rs. 15,000 using the multiple price auction method.

Open Market Operations:

• Open market operations (OMO) refers to a central bank buying or selling short-term Treasurys and other securities in the open market in order to influence the money supply, thus influencing short term interest rates.
• Buying securities adds money to the system, making loans easier to obtain and interest rates decline.
• Selling securities from the central bank's balance sheet removes money from the system, making loans more expensive and increasing rates.
• These open market operations are a method the Fed uses to manipulate interest rates.

https://www.thehindu.com/todays-paper/tp-business/rbi-to-conduct-simultaneous-sale-purchase-of-govt-securities-next-week/article33993095.ece

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