To the extent that tax revenues are boosted by the commodity boom, there may be a need to smooth expenditure and not treat the revenue increase as permanent. A number of primarycommodity exporters, for example Chile and Norway, have created national wealth funds to ensure that expenditure can be maintained when the commodity cycle declines and tax revenues fall.
Third, to avoid affecting credit allocation, it would be preferable to carry out operations in deep and liquid markets. A liquid market permits transactions to be made quickly and with negligible direct effects on the price of the assets bought and sold. The purpose of open market operations is to affect the supply of reserves and thereby the federal funds rate.