What are offsetting open markets operations?

Question

Quizplus · Accepted Answer

Offset open market operations refer to buying or selling government securities to counterbalance unexpected changes in the monetary base due to random factors such as currency flows or changes in bank reserves. It is done to maintain stability in the money markets and to achieve the desired monetary policy objectives. A is incorrect because open market operations are not always executed to change the direction of monetary policy. C is incorrect because offsetting open market operations are only a subset of open market operations executed by the New York Fed.

What Are Offsetting Open Markets Operations