Operating Policy
Statement Regarding Reverse Repurchase Agreements
March 23, 2011

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. 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 first set of operations will be conducted using only the expanded repo counterparties announced on January 31, 2011. The second set of operations will be open to all eligible reverse repo counterparties.

Like the earlier operational readiness exercises, this work is a matter of prudent advance planning by the Federal Reserve. The operations have been designed to have no material impact on the availability of reserves or on market rates. Specifically, 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. 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 results of these operations will be posted on the public website of the Federal Reserve Bank of New York, 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.

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