Open Market Operations (OMO)

Open Market Operations (OMO)

Open market operations are conducted by the RBI by way of sale or purchase of Government securities (G-secs) and Treasury Bills (T-Bills) to adjust the rupee liquidity conditions in the market on a durable basis. The objective of OMO is to regulate the flow of money in the economy. In case of excess liquidity in the system, the central bank sells G-secs to withdraw liquidity and purchases G-secs to infuse liquidity into the system. RBI carries out the OMO through commercial banks and does not directly deal with the public.