Sale and Repurchase Agreement - SRA

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Overnight Rate

    The interest rate at which a depository institution lends immediately ...
  2. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  3. Money Supply

    The entire stock of currency and other liquid instruments in ...
  4. Bank Of Canada - BOC

    The central bank of Canada, that came into existence after the ...
  5. Special Purchase and Resale Agreement ...

    An open market operation in which the Bank of Canada purchases ...
  6. Indirect Bidder

    An entity that purchases Treasury securities at auction through ...
Related Articles
  1. How The U.S. Government Formulates Monetary ...
    Personal Finance

    How The U.S. Government Formulates Monetary ...

  2. The Uptick Rule Debate
    Active Trading Fundamentals

    The Uptick Rule Debate

  3. CDOs And The Mortgage Market
    Insurance

    CDOs And The Mortgage Market

  4. Understanding The Ticker Tape
    Investing Basics

    Understanding The Ticker Tape

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center