<p dir="ltr"><span>Financial Tribune- The transactions were conducted on the platform of the IFB Modern Financial Instruments, according to Afsaneh Orouji, IFB deputy for market affairs. <br> OMO was unveiled Thursday on the sidelines of the CBI General Assembly as a platform for regulating interest rates on interbank market via trading government bonds. <br> It is in line with the CBI’s monetary policy to curb inflation, control lending rates in the interbank market and harness the ballooning liquidity.<br> Banks can now manage their need for liquidity or offer surplus liquidity in the interbank market within the new CBI monetary framework. <br> OMO is a financial instrument through which central banks buy and sell securities in the open market to expand or reduce money supply.<br> The mechanism provides central banks with the capability to buy government bonds to be able to increase the money base (cash reserves) and, by extension, curb inter-banking lending rates. <br> In the same vein, selling government bonds reduces the base money and raises interbank rates. OMO also enables banks to hold bonds as collateral in order to borrow from the CBI.<br> <br class="t-last-br"> </span></p>