Forex News: The Bank of England will Wednesday hold an exceptional fine-tuning operation from 0900 GMT, in which it will offer GBP10 billion in reserves maturing Thursday at the Bank rate of 5.00%.
The central bank, which originally announced the operation last week, said that its purpose was to ensure a smooth pattern of reserves supply, given the large difference in size between April and July's three-month repurchase operations.
"The difference between the value of the funds maturing on Wednesday 16 July from the April 3-month long-term repo operation (worth GBP15 billion), and the size of July's 3-month long-term repo operation (worth GBP5 billion) will give rise to a large temporary reduction in the quantity of sterling reserves," the BOE said.
"The reserves will then be re-offered as normal in the Bank's routine weekly OMO (open market operation) on Thursday 17 July, consistent with the Bank's objective of supplying the quantity of reserves necessary for reserve banks, in aggregate, to meet their reserves targets for the maintenance period."
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