If float decreases to below its normal level, why might the manager of domestic operations consider it more desirable to use repurchase agreements to affect the monetary base, rather than an outright purchase of bonds?

If there is a reduction in float below the usual level, then the domestic manager of functions would consider it desirable to utilize the repurchase contracts to impact the monetary base rather than an outright purchase of the bonds.

It is on the grounds that, on account of the reduction in float, the chief will take on edge open market operations in contrast with the unique open market operations. Under the protective market, operations are meant to balance the developments in factors that would bring about influence the monetary base and the reserves.

A decrease in the float is corrected using defensive open market operations as it causes undesirable changes in the reserves and the monetary base and hence the money supply.

The manager will conduct a defensive open market operation which is a purchase of securities in this case to counterbalance the decrease in the reserve and the monetary base which is a resultant of a decreased float.

In contrast, outright purchases agreements are conducted to bring about a change in the level of the monetary base.

In nutshell, when float decreases below its normal level, then a repurchase agreement which is a temporary defensive open market operation, is more suited to affect the monetary base than an outright purchase as changes in float are corrected using defensive open market operations.