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 liquidity impact of any RRR reduction will be neutralized through offsetting open-market operations and transactions with the national government,' Espenilla said.
42) worth of three-month bills in an open-market operation on Tuesday, reports Dow Jones.
This divergence between discount rate policy and open-market operations could have resulted either from the New York Fed's having lost control over open-market operations or from the Fed's having a sense that there was no further need for monetary ease because there was no demand for it, as indicated by a lack of member-bank borrowing and low nominal interest rates.
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 central bank injected a net CNY28bn into the money market last week through its open-market operations.
94bn) worth of one year bills in its open-market operation on Tuesday.
The bank pulled out CNY86bn from the banking system this week through its regular 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.
002 percent as the BOJ deferred open-market operations to absorb funds from financial institutions.
The apex bank said that it was ready to expand its role in open-market operations and offer cash to banks as the liquidity condition in the nation was coming under strain.
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.
9 Kyodo The Bank of Japan (BOJ) plans to soon include short-term debt-financing bills (FBs) among the financial vehicles it uses in its open-market operations to control liquidity in the money market, BOJ officials said Tuesday.