The term 'Open Market Operations' are conducted by the RBI to:
A. Manage liquidity and influence short-term interest rates
B. Determine tax rates
C. Regulate the stock market directly
D. Fix the long-term fiscal deficit target
Answer: Option A
Solution (By JKSSB Mock Tests)
Open Market Operations involve the buying and selling of government securities by the RBI to inject or absorb liquidity and thereby influence money market interest rates.
Explanation:
The primary market is where new securities are issued and sold for the first time to raise fresh capital. The secondary market deals with subsequent trading of existing securities.
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