open-market operations

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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 operations

The purchase and sale of government securities from a primary dealer in the open market by the Federal Reserve in order to influence the money supply, credit conditions, and interest rates. For example, large purchases of securities will release funds into bank reserves which, in turn, will be used for lending. This action increases the supply of money, and, at least temporarily, pushes down interest rates. Open-market operations have significant effects on security prices. See also Federal Open Market Committee.

Open-market operations.

Open-market operations allow the Fed to implement its monetary policy and regulate the money supply.

The Federal Reserve's Open Market Committee (FOMC) regularly instructs the securities desk of the Federal Reserve Bank of New York to buy or sell government securities as part of the process of increasing or decreasing the cash available for lending.

References in periodicals archive ?

The RBI will manage evolving liquidity conditions for handling short-term fluctuation and open market operations for durable basis," said Acharya.

Banking system liquidity moving towards neutrality: RBI Dy Gov

Due to these open market operations that injected reserves while federal funds were trading below the FOMC's target rate, an expectation set in among market participants that the Federal Reserve would not try to boost the federal funds rate when it drifted below the target rate.

The financial crisis and the implementation of monetary policy

The effect of Fed lending on the allocation of credit is intensified when the Fed offsets the effect of its lending activity on the total supply of credit through open market operations.

The fed, liquidity, and credit allocation

Suda put the shortfall in tenders in the open market operation in a positive light, saying the phenomenon is taking place because the financial system has been improving on the back of declining nonperforming loans.

BOJ's Suda hints at need to allow flexibility in liquidity target

The Chinese central bank has increasingly relied on open market operations for liquidity management rather than cuts in interest rates or reserve requirement ratios.

Chinese central bank drains money from market

With immediate effect, in accordance with the needs of the monetary policy, open market operations will be carried out on each working day," the PBOC said, in a (http://www.

China's Central Bank Expands Liquidity Management Program

China's key money rate fell to nearly a 10-month low, shrugging off a net drain in open market operations due to ample liquidity.

CHINA'S KEY MONEY RATE FALLS NEAR 10-MONTH LOW

Open market operations can be another source of liquidity to the system.

Providing liquidity

This paper uses daily data compiled by the author from the records of the Trading Desk of the Federal Reserve Bank of New York over the period March 1, 1984, through December 31, 1996: He analyzes the Desk's use of its operating procedure in implementing monetary policy and the extent to which open market operations affect the federal funds rate--the liquidity effect.

Open market operations and the federal funds rate

The yield on the key 10-year Japanese government bond briefly fell to a record intraday low Wednesday morning after the Bank of Japan said it will conduct open market operations to purchase government bonds.

Yield on key gov't bond hits record intraday low in morning

By close of business Wednesday, the New York Fed had already moved some of its open market operations to a contingency site in East Rutherford, N.

The week the fed saved the world: an inside glimpse at the Greenspan-McDonough-Ferguson team's backroom maneuvering

The apex bank said on Thursday that it has maintained its interest rates for open market operations unchanged.