Transcations in which the Federal Reserve sells a government security to a
dealer or a foregin central bank and agrees to buy back the security to a dealer or a foreign central bank and agrees to buy back the security on a specified date (usually within seven days) at eh same price (the reverse of a
repurchase agreement). Such transaction allow the Federal Reserve to temporarily absorb
excess reserves from the banking system, limiting the ability of banks to make new
loans and
investments.