Open Market Operations (OMO) are actions by a central bank to buy or sell government securities in the open market to control money supply and liquidity in the economy.
Open Market Operations are a key monetary policy tool used by central banks like the Reserve Bank of India to manage liquidity, interest rates, and inflation.
By buying or selling government bonds, the central bank influences how much money is available in the banking system.
"If RBI buys government bonds from banks, it injects money into the economy, increasing liquidity."