open market operation
- noun a sale or purchase of government stock by ordinary investors, used by the government as a means of influencing money supply
- The sale or purchase of government bonds by a central bank, in exchange for domestic currency or central-bank deposits. This changes the monetary base and therefore the domestic money supply, contracting it with a bond sale and expanding it with a bond purchase.
- acronymOMO (written as Open market operation)
- open market operation.
- An action taken by a central bank to directly influence the nation's money supply and interest rates through the purchase and sale of bonds or other debt instruments in the open market. Open market operations are the principal monetary policy tool of a central bank and strongly affect exchange rates in the forex market.