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.

See BANK-DEPOSIT CREATION, RESERVE ASSET RATIO, FUNDING.

References in periodicals archive ?
MUFG Bank (MUFG) (NYSE: MTU) (TYO: 8306) (8306.MU) has said that the People's Bank of China has granted approval for the bank to open-market operations in China, becoming the first Japanese institution and fourth non-Chinese lender to receive the approval, according to an online report.
The CBC may further augment the scale of the open-market operation, when necessary, to mop up excess idle fund on the market.
The People's Bank of China, which conducts regular open-market operations Tuesdays and Thursdays, has drained a net CNY83bn from the money market last week through its open-market operations.
Insiders noted that the CBC will continue mopping up flooding idle funds in the market via open-market operation. From April this year, it has overbought NT$800 billion of negotiable certificates of deposits, thereby driving down the banking excess reserves to NT$86.9 billion in July, down from NT$147.2 billion in April.
The People's Bank of China, which carries out regular open-market operations on Tuesdays and Thursdays, injected a net CNY28bn into the money market last week through its open-market operations.
The central bank, which performs open-market operations on Tuesdays and Thursdays, has drained a net CNY103bn from the money market last week.
The People's Bank of China (PBOC), which carries out regular open-market operations on Tuesdays and Thursdays, has drained a net CNY49bn from the money market last week.
The central bank had injected a net CNY76bn into the money market last week through its open-market operations.
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.
China's central bank has said that will sell CNY1bn (USD150m) worth of one-year bills in its regular open-market operation on Tuesday, reports Dow Jones.
China's central bank has said that it will sell CNY23bn (USD3.39bn) worth of one-year bills in its regular open-market operation on Tuesday.
The People's Bank of China (PBOC) has said that it was planning to sell one-year bills worth CNY22bn (USD3.3bn) in its regular open-market operation on Tuesday, reports Dow Jones.