For example, long-term increases in the private sector's demand for currency have largely been met by outright purchases of securities. Over the years, the Fed has accumulated a portfolio of more than $ billion of Treasury securities, mostly as an offset to its issuance of currency.
In contrast, in cases in which variations in the demand for reserves or in external factors affecting reserve supply appear likely to be temporary, the Desk typically prefers to conduct open-market operations through short-term or long-term repurchase agreements, known as repos. Under a repurchase agreement, the buyer and seller of a security agree to reverse the transaction after a certain fixed period.