Login With Google
RBI to buy, sell G-secs
Why is it in news?
- The Reserve Bank of India has announced the simultaneous purchase and sale of Government of India securities (G-secs) for ₹10,000 crore each.
- The purchase and sale would be done as the Open Market Operations (OMO).
Open Market Operations:
- OMOs are the market operations conducted by the RBI by way of sale and purchase of G-Secs to and from the market.
- Its objective is to adjust the rupee liquidity conditions in the market on a durable basis.
- When the RBI feels that there is excess liquidity in the market, it resorts to sale of securities thereby sucking out the rupee liquidity.
- When the liquidity conditions are tight, the RBI may buy securities from the market, thereby releasing liquidity into the market.