[drcode]

This is admittedly a good and intelligent retort to my comment. However, I did use the term "net inflation" so this raises the issue as to whether time-shifting the monetary supply by selling bonds/raising interest rates via OMO really counts, since it usually merely postpones the increase in monetary supply (i.e. more money needs to be printed to cover the interest payments this requires, and the principal will eventually come due.)

However, you are right though that adjusting reserve requirements does generate a net sink for excess monetary supply, though it is of limited capacity. Also, it is not a very viable tool right now, since bank reserves are already at an all time high.