Distinguish between:
3. Bank Rate and Open Market Operations
Basis
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Bank Rate
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Open Market Operations
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Meaning
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It refers to the rate at which the Central bank grants loans to the commercial Banks.
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It refers to the buying and selling of government securities.
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Influence on the interest rate and the money supply
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It affects the rate of interest directly and the money supply indirectly.
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It affects the rate of interest indirectly and the money supply directly.
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