ECON 3430 Lecture Notes - Lecture 16: Landing Vehicle Tracked, United States Treasury Security, Monetary Base

• School: York University
• Department: Economics
• Course: ECON 3430
• Professor: Brenda Spotton- Visano

Document Summary

If overnight funds are traded at a rate above the target ior, the bank enters into spras at a price that works out to the target ior: hence, sras relieve undesired upward pressure on overnight interest rates. If, on the other hand, overnight funds are traded at a rate below the target rate, the bank of canada enters into sras: hence, sale and repurchase agreements alleviate undesired downward pressure on overnight rates. Transfer deposits from banks to bank of canada: drawdowns. Transfer deposits from bank of canada to banks: redeposits: receiver general auctions. Suppose the government receives more from the public than it pays out: bank of canada will neutralize this by arranging a net increase of in government deposits, receiver general auctions. Suppose instead there is a net disbursement of (government pays more than it receives: bank of canada will neutralize this by arranging a net decrease of in government deposits.