Choose the correct statement with respect to Open Market Operations Open market operations OMO refer...........

Economic Affairs Financial Markets

Download Solution PDF

Choose the correct statement with respect to Open Market Operations:

Open market operations (OMO) refer to the buying and selling of government securities in the open market in order to expand or contract the amount of money in the banking system.
One of the factors contributing to the rise in bond yields has been stepped-up Open Market Operations (OMO) by the RBI in 2017-18.

1 only

2 only

both

none

छोटे Courses बड़े Results

Master Financial Markets

Prepare through Micro-courses

Try Now

Explanation:

Bond yields have surged around 100 basis points in the last six months, essentially conveying that investors don’t like them anymore. It is well known that foreign investors have begun dumping Indian bonds for a month now and even local banks are wary after choking on losses from previous buying binges.

Forsaken by the biggest buyers, the bond market has seen trading volume dry up and consequent rising yields have wreaked havoc on many a balance sheet.