Open Market Operations refer to the buying and selling of government securities (such as Treasury bills, notes, and bonds) by the central bank in order to influence money supply, interest rates, and economic activity.
Related terms
Quantitative Easing: A type of open market operation where a central bank buys long-term government bonds or other financial assets in order to stimulate economic activity during times of recession or low inflation.
Reverse Repo: An open market operation where the central bank sells government securities to commercial banks or other financial institutions with an agreement to repurchase them at a later date.
Liquidity: The ease with which an asset can be converted into cash without affecting its price. It refers to how quickly something can be bought or sold in a market without causing significant price changes.