Open Market Operations
FundamentalsA central bank's routine buying and selling of securities to hold the short-term rate near its policy target — implementation of policy, not policy itself.
Open market operations are a central bank's day-to-day purchases and sales of securities in the money market, used to keep the short-term interest rate at or near the level policy has set. Buying securities adds reserves to the banking system and pushes the rate down; selling them, or letting repurchase agreements mature, drains reserves and pushes it up.
These are implementation rather than policy: the rate decision is the announcement, and open market operations are how it is made real day by day. They rarely move currencies on their own, because they are expected — the exceptions are operations large enough to signal a change in stance, or ones that reveal stress in short-term funding markets.