All About OMO [Open Market Operations] and Term Repo of Monetary Policy Of RBI

Lesson 5 of 6 • 23 upvotes • 9:06mins

Vikas Kumar Singh Tomar

Market Stabilisation Scheme (MSS): This instrument for monetary management was introduced in 2004. Surplus liquidity of a more enduring nature arising from large capital inflows is absorbed through sale of short-dated government securities and treasury bills. Starting with the first bi-monthly statement of monetary policy in April 2014, the Reserve Bank has changed the normal frequency of monetary policy announcements from eight times in a year (i.e., four quarterly and four mid- quarter) to six times in a year (i.e., bi-monthly). Open Market Operations (OMOs): Buying and selling of government securities is as Open market operations. (For injection/absorption of liquidity in the market)