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Define the Open Market Operations? Or, What do You Mean by Open Market Operations?
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Open Market Operations refers to sale and purchase of government securities in the open market by the central bank of the country. To decrease the flow of credit (as during inflation), securities are sold off by the central bank. By selling the securities, liquidity is withdrawn from the economy and hence, a reduction in credit creation capacity of the commercial banks. Exactly opposite is done in case of deflation: securities are purchased by the Central Bank.

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