In the context of Indian economy, ‘Open Market Operations’ refers to

In the context of Indian economy, ‘Open Market Operations’ refers to

A. Borrowing by scheduled banks from the RBI

B. Lending by commercial banks to industry and trade

C. Purchase and sale of government securities by the RBI

D. None of these

Explanation:

The Reserve Bank said the first purchase of government securities worth Rs 25,000 crore under the G-sec Acquisition Programme (G-SAP 1.0) will be done on April 15 with a view to enabling a stable and orderly evolution of the yield curve. Market participants always wanted to know the RBI’s Open Market Operations (OMO) purchase calendar, and the RBI has now provided that to the market through this announcement on GSAP. It will provide certainty to the bond market participants with regard to RBI’s commitment of support to the bond market in FY22.