How does a Central bank control availability of credit by open market

1.	How does a Central bank control availability of credit by open market operations ?
Answer» Central bank uses various tools to control inflation and money available for banks to lend. One of such tools is using open market operations(OMO), in OMO the central banks mainly sell and buy government secutiries to control the money available with bank, when the central bank decides to suck out the liquidity in the banking sector they introduce more bonds, and when they want to liqiufy the banks with more money they start buying back the government secutiries.Based on the bond availability or price the banks cost to buy money from other banks reserve will be affected thus it effects the interest rate of advances and deposits in banking system has a whole.

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