open-market operation

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Open-market operation

Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply.

Open-Market Operations

The buying and selling of U.S. Treasury securities. The Federal Reserve conducts open market operations as a primary way of influencing inflation and economic growth. These securities are sold at certain interest rates as a way of controlling the money supply. See also: FOMC.

open-market operation

an instrument of MONETARY POLICY involving the sale or purchase of government TREASURY BILLS and BONDS as a means of controlling the MONEY SUPPLY. If, for example, the monetary authorities wish to increase the money supply, then they will buy bonds from the general public. The money paid out to the public will increase their bank balances. As money flows into the banking system, the banks’ liquidity is increased, enabling them to increase their lending. This results in the multiple creation of new bank deposits and, hence, an expansion of the money supply.


References in periodicals archive ?
The CBC may further augment the scale of the open-market operation, when necessary, to mop up excess idle fund on the market.
Insiders noted that the CBC will continue mopping up flooding idle funds in the market via open-market operation.
The PBOC, which carries out regular open-market operations on Tuesdays and Thursdays, did not offer any repurchase agreements on Tuesday.
People's Bank of China (PBOC), which carries out regular open-market operations on Tuesdays and Thursdays, has drained a net CNY67bn from the money market last week through its open-market operations.
It starts by using open-market operations in an effort to achieve "operating targets," which are the values of bank reserves and the federal funds rate that it believes are consistent with achieving the values of "intermediate targets" (e.
The Chinese central bank has intervened in the banking system through open-market operations.
The People's Bank of China offered CNY50bn of seven-day reverse repos in open-market operations.
The Bank of Japan pumped 500 billion yen into the money market on Thursday via open-market operations to stem a rise in overnight call money rates.
The People's Bank of China drained CNY221bn from the banking system this week, via its regular open-market operations.
Following the same-day open-market operations, the benchmark rate for short-term interest rates dropped to 0.
The bank pulled out CNY86bn from the banking system this week through its regular open-market operations.
002 percent as the BOJ deferred open-market operations to absorb funds from financial institutions.