TO: Primary Dealers

FROM: Sandy Krieger

DATE: October 14, 1999

SUBJECT: Auction amounts for October 20 sale of options on repurchase transactions

On the basis of preliminary indications of interest in the purchase of options at the upcoming auctions, we have decided to increase the amount of options available for purchase at the October 20 auctions to $12 billion for the December 23 Strip, $18 billion for the December 30 Strip and $12 billion for the January 6 Strip. As previously indicated, if demand is evident, FRBNY will offer similar or larger amounts at the second auction. The FRBNY may raise or lower the amounts to be auctioned for each Strip, depending on its sense of demand. Amounts to be auctioned will be announced no later than 4 p.m. on the Thursday prior to the auction date.