December 8, 2014 / 2:57 PM / 3 years ago

U.S. Fed begins term reverse repo testing

NEW YORK (Reuters) - The U.S. Federal Reserve on Monday began testing its term reverse repurchase agreements to examine how this tool might be used when the central bank decides to tighten monetary policy.

In the first of four weekly operations, Wall Street dealers, money market mutual funds and mortgage finance agencies could bid on $50 billion worth of 28-day term reverse repos (RRP) that mature on Jan. 5, the Fed said via the New York Federal Reserve website.

The term RRP operation will close at 10:00 EST.

Reporting by Richard Leong; Editing by Lisa Von Ahn

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