NEW YORK (MNI) – The following is the text of a statement Thursday
by the New York Federal Reserve Bank:

In November 2009, the Federal Open Market Committee (FOMC)
authorized the New York Fed to undertake reverse repurchase transactions
(reverse repos) for the purpose of testing operational readiness. The
New York Fed has undertaken several such transactions, each one
announced on the Markets section of the Banks website.

At its meeting in June 2012, the FOMC amended the Authorization for
Domestic Open Market Operations to authorize the New York Fed to
undertake certain open market transactionsoutright purchase and sale of
securities, and repos, in addition to reverse reposfor the purpose of
testing operational readiness.

As such, beginning Friday, August 3, the New York Fed intends to
conduct a series of small-value repos using all eligible collateral
types. The repos will be conducted only with the primary dealers. The
New York Fed has not conducted a repo since December 30, 2008. Since
that time, there have been several system changes, changes to support
triparty reform and six primary dealers have been added.

Like the earlier reverse repo 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 repo 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
amount of repo is reported as a factor supplying reserves in Table 1 in
the Federal Reserve’s H.4.1 statistical release and as asset items in
Tables 8 and 9 of that release.

** MNI New York Newsroom: 212-669-6430 **

[TOPICS: M$U$$$,MMUFE$,MGU$$$,MN$RP$]