"We prefer to use OMO sales when there is not much clamour for borrowing from the government, but sometimes we don't really have a choice and we have to do it," Rajan told analysts in a post-policy conference call.
When asked whether OMO sales is dependent on market conditions, Rajan said all actions of the central bank to some extent are affected by the markets.
"Where it is easier to operate, where distortion may be higher or lower, at the end of it, all markets are interconnected and any temporary distortion get dissipated over time," he said.
"We think of these as us determining where the transaction cost of operating are the lowest and that's where we go and operate where we can," Rajan said.