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Sale and Repurchase Agreement - SRA
What does it mean?
An open market operation implemented by the Bank of Canada designed to raise overnight interest rates and tighten the money supply.
In Other Words...
By way of a SRA, the Bank of Canada sells securities to the chartered banks and agrees to repurchase them the following day. Because selling these securities requires the chartered banks to spend some cash, the money supply is decreased and this increases interest rates.
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Related Terms
Bank of Canada | Interest Rate | Money Supply | SPRA
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