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Open Market Operations
In open market operations, the RBI buys government bonds from banks to inject cash into the system, or sells them to absorb cash. Buying bonds adds liquidity and tends to push interest rates down; selling does the opposite.
Why It Matters
Changing the repo rate sets the price of money. Open market operations change how much of it is around.
In India
Alongside its December 2025 rate cut, the RBI announced ₹1 lakh crore of bond purchases to make sure banks had enough cash to pass the lower rate on to borrowers.