A contractionary sterilised foreign exchange operation is a contractionary nonsterilised foreign exchange operation accompanied by an expansionary open market operation. That is, the authority sells foreign bonds, which is a swap of foreign bonds for money. Next, almost simultaneously, the authority purchases domestic bonds with the money received from the sale of foreign bonds, which is a swap of money for domestic bonds. The monetary base is kept unchanged through these opposite operations. So what are achieved from executing these operations? If we link the two operations together, then they are simply a swap of foreign bonds for