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Investing Glossary:
Matched sale transaction
Copyright 2009,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| Term: |
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| Definition: |
| Applies mainly to convertible securities. Procedure whereby the Federal Reserve Bank of New York sells Government securities to a nonbank Dealer against payment in federal funds. The agreement requires the dealer to Sell the securities back by a specified date, which ranges from 1 to 15 days. The Fed pays the dealer a rate of Interest equal to the Discount rate. These transactions, also called reverse repurchase agreements, decrease the Money supply for temporary periods by reducing dealers` bank balances and thus excess reserves.
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