The fed indirectly controls money supply through the open market operations. For instance, when the fed buys bonds, this increases in demand for bonds causes nominal interest rates to decrease. When the fed buys bonds, bank reserves , increase which reduces the need for banks to borrow. this causes the federal funds rate to decrease.
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Important banks conduct open market operations that allows you to regulate the cash supply in the economic system. for example, in India, open marketplace operations are undertaken by way of the Reserve bank of India or RBI.
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