When the RBI wants to inject durable liquidity into the banking system and lower long-term interest rates, it conducts Open Market Operations (OMOs) by ___ government securities.

Answer: purchasing (or buying)

When the RBI purchases government bonds from the open market, it pays for them by crediting the reserves of commercial banks. This infusion of permanent cash increases the banks' lendable resources, expands the money supply, and drives down bond yields, thereby lowering long-term borrowing costs for the economy.