What is the meaning of open market operation?

Question

Open market operative as regards ways that Central Bank regulate the supply of money.

Answer 1

Open market operations are central bank purchases or sales or sales of government securities in order to sell or buy money to influence rates in the banking system.

Answer 2

The open market operation refers to sales of government securities or bank purchases in order to contract or expand in the banking system and influence interest rate. 

Answer 3

It refers to the purchase and sales of securities in the open market by the federal reserve (fed). The fed conduct open market operation to regulate the supply of money that is in the reserve in US bank. 

Answer 4

Open market operations (OMOs) are the primary tool used by central banks to regulate the supply of money in the economy. OMOs involve the buying and selling of government securities in the open market, with the aim of influencing the money supply, interest rates, and economic activity. OMOs are used to stimulate the economy when it is in recession, or to slow it down when it is overheating.