Open market operations refer to the buying and selling of government securities by a central bank in the open market. Central banks use open market operations to influence the supply of money in the economy and to achieve their monetary policy objectives.

When a central bank buys government securities, it injects money into the economy, increasing the supply of money. This can stimulate economic activity and increase inflation. Conversely, when a central bank sells government securities, it reduces the supply of money, which can slow down economic activity and reduce inflation.

Open market operations are one of the most important tools used by central banks to implement monetary policy. They are flexible and can be used to adjust the supply of money quickly and efficiently. The Federal Reserve in the United States and the European Central Bank in the Eurozone are examples of central banks that use open market operations to implement their monetary policy.