The Reserve Bank of India (RBI) will carry out an open market operation and sell government of India bonds worth Rs 12,000 crore today, i.e. July 18, 2013. The RBI carries out an open market operation in order to suck out or put in rupees into the financial system. When the RBI needs to suck out rupees from the system it sells government of India bonds, like it is doing today.
Banks and other financial institutions buy these bonds and pay the RBI in rupees, and thus the RBI sucks out rupees from the market.
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