No. 2199

THURSDAY, APRIL 1, 1999

TIME CHANGE FOR TEMPORARY OPEN MARKET OPERATIONS

NEW YORK-- The Federal Reserve Bank of New York today announced that effective April 5, 1999, the routine time for the trading desk (the Desk) to announce temporary open market operations with primary dealers will shift one hour early to around 9:30 AM EST.

The main motivation for this change is to operate on a routine basis during the time when the market for repurchase agreements in government securities is more liquid.

Limitations in the availability of data, which provide the basis for internal daily forecasts of the supply of reserves in the banking system, previously have prevented the Desk from entering the market earlier than 10:30 AM on a routine basis.

Recent improvements in the flow of reserves data within the Federal Reserve System and between the System and the Department of the Treasury enable the reserve forecasters to receive most of the essential reserve supply data about an hour earlier.

On some occasions the Desk may choose to enter the market earlier than 9:30 AM, which usually will reflect a judgment that earlier entrance will better enable the Desk to complete the total amount of desired transactions for that day.

There also may be occasions, particularly around tax payment dates, when the Desk may choose to operate somewhat later in the morning, or choose to conduct temporary operations more than once in a day. This usually will reflect the impact of late-arriving reserve supply data on the Desk’s forecast.