Open market operations

method of monetary policy of the state, which consists in the purchase or sale of securities by the central bank in the open market. It is used to increase or decrease the reserves of commercial banks, influence the level of market interest rates, regulate the rate of government securities. This increases or decreases the amount of money in circulation. Operations on the open market are carried out with short-term and long-term obligations of the Treasury and state corporations, bonds of commercial and industrial firms, banks, commercial bills discounted by the central bank. O. limit on about. R. approved by the Board of Directors.