System Open Market Account - SOMA

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DEFINITION of 'System Open Market Account - SOMA'

An account that is managed by the Federal Reserve Bank, containing assets acquired through operations in the open market. The assets in the System Open Market Account (SOMA) serve as a management tool for the Federal Reserve's assets, a store of liquidity to be used in an emergency event where the need for liquidity arises, and as collateral for the liabilities on the Federal Reserve's balance sheet such as U.S. dollars in circulation.

BREAKING DOWN 'System Open Market Account - SOMA'

The SOMA consists of the domestic securities and foreign currency portfolios of the Federal Reserve. The domestic portion consists of U.S. dollar-denominated treasuries, while the foreign currency portion consists of different investments all denominated in Euro and Yen currencies.

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