Sale and Repurchase Agreement - SRA


DEFINITION of 'Sale and Repurchase Agreement - SRA'

An open market operation, implemented by the central Bank of Canada, that is designed to affect overnight interest rates and modify the supply of money.

BREAKING DOWN 'Sale and Repurchase Agreement - SRA'

An SRA is implemented when the Bank of Canada sells securities to a chartered bank and agrees to repurchase them the following day.

This is a contradictory move by the Bank of Canada on the monetary system, since selling these securities requires the chartered banks to spend some cash, thereby reducing the money supply and increasing interest rates.

  1. Overnight Rate

    The interest rate at which a depository institution lends immediately ...
  2. Money Supply

    The entire stock of currency and other liquid instruments in ...
  3. Special Purchase and Resale Agreement ...

    An open market operation in which the Bank of Canada purchases ...
  4. Bank Of Canada - BOC

    The central bank of Canada, that came into existence after the ...
  5. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  6. Futures Market

    An auction market in which participants buy and sell commodity/future ...
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