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Special Purchase and Resale Agreement - SPRA
What does it mean?
An open market operation implemented by the Bank of Canada designed to lower overnight interest rates and increase the money supply.
In Other Words...
By way of a SPRA, the Bank of Canada buys securities from the chartered banks and agrees to resell them the following day. Because selling these securities requires the Bank of Canada to spend some cash, the money supply is increased and this helps decrease interest rates.
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Related Terms
Bank of Canada | Interest Rate | Money Supply | SRA
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