The Open Market Desk of the Federal Reserve Bank of New York is announcing a technical change to the way it will implement certain temporary open market operations on behalf of the Federal Reserve System. The Desk plans to begin the practice of arranging System Repurchase Agreements with an original maturity of 14 days, instead of 28 days, at its weekly auctions that typically occur on Thursdays. The effective date for this modification will be September 18, 2003. The change is purely a technical measure that is being made to improve the efficiency of operations.

The transition to weekly operations with an original maturity of 14 days will provide the Open Market Desk with greater flexibility to address the demand for banking system reserves over the two-week length of a reserve maintenance period. In addition, weekly operations with shorter terms will allow the Desk to more accurately align financing transactions with the movements in our reserve forecast.

The Desk plans to continue to use operations with an original maturity of up to a maximum of 65 business days (as currently authorized) whenever appropriate to meet reserve needs that are expected to persist for relatively long periods of time.