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    Question

    What is the role of Open Market Operations (OMO) by

    RBI?
    A Increase forex reserves Correct Answer Incorrect Answer
    B Control inflation and liquidity by buying/selling govt securities Correct Answer Incorrect Answer
    C Control bank lending rates directly Correct Answer Incorrect Answer
    D Provide agricultural subsidies Correct Answer Incorrect Answer
    E Reduce CRR Correct Answer Incorrect Answer

    Solution

    Open Market Operations (OMO) are RBI tools to control liquidity/inflation by buying or selling government bonds in the market.

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