[Solved] Open market operations of RBI refer to buying and selling of -

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Q.	Open market operations of RBI refer to buying and selling of -
A.	Commercial bills
B.	Foreign exchange
C.	Gold
D.	Government bonds
Answer» D. Government bonds
Explanation: OMOs are the market operations conducted by the Reserve Bank of India by wayof sale/ purchase of Government securities to/ from the market with an objective to adjust the rupee liquidity conditions in the market on a durable basis. When the RBI feels there is excess liquidity in the market. it resorts to sale of securities thereby sucking out the rupee liquidity. Similarly, when the liquidity conditions are tight, the RBI will buy securities from the market, thereby releasing liquidity into the market.

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