The Federal Reserve Bank of New York announced plans to conduct repurchase-agreement operations within the second half of December that will span to January 2020, reported Bloomberg.
The regulator will now conduct term operations totalling $365 billion. The 16 December 2019 operation is a 32-day offering with a maximum limit of $50 billion, while the other term actions range from 13 to 15 days with a maximum size of $35 billion, tenors it has used previously.
The central bank also plans to adjust the size of some of its overnight repo operations to provide additional liquidity for the year-end. While the offering size will remain mostly unchanged at $120 billion, it plans to conduct a one-day forward settlement operation of $75 billion on 30 December 2019 that settles on 31 December 2019 and matures on 2 January 2019.
Additionally, the New York Fed will also increase the sizes of the overnight actions to $150 billion on 31 December 2019 and 2 January 2020.
While the Fed’s repo offerings and Treasury-bill purchases have calmed markets since the September 2019 spike that took overnight repo rates as high as 10 per cent, concerns about the year-end period remain and participants have been flocking to Fed term offerings that will carry them through to January 2020.