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Which one of the following is not an open market operation? 1)Central banks conduct auctions of...

Which one of the following is not an open market operation?
1)Central banks conduct auctions of reserves as repurchase agreements
2)Purchasing and selling foreign exchange.
3)Purchasing or selling government securities
4)Making loans

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Answer #1

Answer is option 4) making loans is not an example of OMO

Bcoz OMO is used to adjust liquidity in the market , so when govt securities are bought & sold then it's an example of OMO.

Via expansionary & contractionary monetary policy , liquidity is adjusted.

In options 1, & 2 , also liquidity is adjusted.

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