UPDATE 1-Fed says selling Treasury coupons to drain reserve
April 2nd, 2008 | by admin |(Updates with details on operation)
NEW YORK, April 2 (Reuters) - The U.S. Federal Reserve sold$5 billion of Treasury coupons to drain permanent U.S. bankingreserves, the New York Fed said on Wednesday.
This type of operation helps the Fed to maintain itsreserve and rate targets by offsetting other measures aimed toease credit bottlenecks in the U.S. financial system, accordingto analysts.
The New York Fed, which conducts open market operations forthe central bank, said it sold $1 billion of coupons from fiveoutstanding Treasury issues whose maturities range from07/31/09 to 11/15/09.
Fed funds last traded at 2.50 percent, above the Fed’scurrent 2.25 percent target rate.
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(Reporting by Richard Leong, Editing by Chizu Nomiyama,)
