Special Purchase and Resale Agreement

Special Purchase and Resale Agreement

A practice in which the Bank of Canada buys securities from a bank with the proviso that the bank repurchases the same securities for an agreed-upon price the following day. The Bank of Canada does this to increase the amount of money in circulation (the purchase price for the securities), which reduces overnight interest rates and increases the availability of credit. See also: Open-market operation.
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The bank operates through Special Purchase and Resale Agreements, or SPRAs, buying securities with the agreement to sell them back the next business day, effectively injecting money into markets.
The bank operates through Special Purchase and Resale Agreements, buying securities with the agreement to sell them back the next business day.
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