By Sheila Mullan
NEW YORK (MNI) – The New York Federal Reserve Bank Tuesday
announced it will conduct more small real-value reverse repos with its
counterparties starting Wednesday.
“As noted in the October 19, 2009, Statement Regarding Reverse
Repurchase Agreements, the Federal Reserve Bank of New York has been
working internally and with market participants on operational aspects
of triparty reverse repurchase agreements to ensure that this tool will
be ready if the Federal Open Market Committee decides it should be
used,” it said.
“Beginning tomorrow, the New York Fed intends to conduct another
series of small-scale, real-value reverse repurchase transactions using
all eligible collateral types,” the New York Fed added.
“The first set of operations will be conducted using only the
expanded repo counterparties announced on May 23, 2011. The second set
of operations will be open to all eligible reverse repo counterparties.”
The New York Fed stressed that “like the earlier operational
readiness exercises, this work is a matter of prudent advance planning
by the Federal Reserve” and is designed to have “no material impact” on
the availability of reserves or on market rates.
“These operations do not represent a change in the stance of
monetary policy, and no inference should be drawn about the timing of
any change in the stance of monetary policy in the future,” the New York
Fed reiterated.
Specifically, statement noted that the aggregate amount of
outstanding transactions will be very small relative to the level of
excess reserves, and the transactions will be conducted at current
market rates.
The results of these operations will be posted on the public
website of the New York Fed, together with the results for other
temporary open market operations. The outstanding amounts of reverse
repos are reported as a factor absorbing reserves in Table 1 in the
Federal Reserve’s H.4.1 statistical release, and as liability items in
Tables 8 and 9 of that release.”
In other news, Fed officials said there was no timetable as yet on
when the list of GSEs that are accepted as counterparties will be
released. GSEs had to submit their application by last Friday.
–email: smullan@marketnews.com
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