OMO,Open market operations

OMO ,open market operations
Omo open market operations is the activity by central bank to maintain the currency flow in their country.the central bank can either buy or sell government bonds.

If it buy the bonds, money will be injected to banks.the banks will lend more money to businesses and individuals.there will be decrease in interest rates.employment will increase, spending will be more, less saving.the economy will bloom.

If central bank sell the bonds, the flow of money is controlled.interest rate increases.less spending, unemployment increses, less savings, the economy comes down.