US Fed awards fewest reverse repos in two weeks

04 Mar, 2015

NEW YORK: The Federal Reserve on Wednesday awarded the fewest reverse repurchase agreements in two weeks as investors preferred to lend on the open market due to higher interest rates, according to Fed data.

The U.S. central bank awarded $95.10 billion of overnight fixed-rate reverse repos to 39 bidders at an interest rate of 0.05 percent, the Federal Reserve Bank of New York said on its website.

On Tuesday, the Fed allotted $110.87 billion in overnight reverse repos to 45 bidders including Wall Street dealers, money market mutual funds and mortgage finance agencies, also at an interest rate of 0.05 percent.

Demand for the Fed's RRPs tends to fall when the interest rate on repurchase agreements rises. The repo rate was last quoted at 0.18 percent to 0.22 percent, compared with 0.15 percent late on Tuesday, according to ICAP.

Copyright AFP (Agence France-Presse), 2015

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