Open market operations

Updated: Aug 20, 2021

Operations by the central bank intended to stabilize interest rates or adjust the quantity of money in circulation. For example, the Bank of England may increase the quantity of money enormously by buying securities on a large scale in the open market. The money it spends will increase the balances of the clearing banks, and this will enable them to lend an even greater amount to the public.

Reference: The Penguin Business Dictionary, 3rd edt.

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