The correct answer is Open Market Operation.An indirect instrument of monetary policy is Open Market Operation.The most common direct instruments are interest rate controls, credit ceilings, and directed lending (lending at the behest of the authorities, rather than for commercial reasons).The three main types of indirect instruments are open market operations, reserve requirements, and central bank lending facilities. Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often as an attempt to reduce inflation or the interest rate, to ensure price stability and general trust of the value and stability of the nation's currency.Additional InformationImportant terms used in the Banking sector:Statutory Liquidity Ratio or SLR is a minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold, or other securities.LRR (Legal Reserve Ratio) refers to that legal minimum fraction of deposits which the banks are mandated to keep as cash with themselves.The Reverse Repo Rate is a mechanism to absorb the liquidity in the market, thus restricting the borrowing power of investors.