Open market operation

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Open market operation. 1 connected concept: Money supply (related to).

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Community · Velocity of money

Summary

In macroeconomics, an open market operation (OMO) is an activity by a central bank to exchange liquidity in its currency with a bank or a group of banks.

28 words

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Connections1

a primary mechanism for controlling money supply
Central banks use open market operations to buy or sell government securities, directly influencing the amount of reserves in the banking system and thus the money supply.
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