Matched Sale-Purchase Transactions

Summary of Matched Sale-Purchase Transactions

An arrangement whereby Treasury bills are sold by the Federal Reserve system, through the Federal Reserve Bank of New York, for periods of one to seven days, with subsequent repurchase by the Federal Reserve. Such transactions, also known as reverse repurchase agreements, serve initially to reduce bank reserves, with a reverse effect at the time the securities are repurchased by the Federal Reserve.

(Main Author: William J. Miller)