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Fed Boosts Money to Banks in Overnight Repo Lending to $175B

Fed Boosts Money to Banks in Overnight Repo Lending to $175B
(Macgyverhh/Dreamstime)

Wednesday, 11 March 2020 03:45 PM

The Federal Reserve Bank of New York said it will increase its repurchase operations further starting with Thursday’s overnight offering, while adding term actions.

It announced a schedule for 14-day term repo operations for March 12 to April 9. The largest will have a maximum offering size of $45 billion. It will also conduct three one-month actions of at least $50 billion beginning Thursday.

On Monday, the bank unexpectedly increased the size of this week’s repo offerings through Wednesday, to $150 billion for the overnight action and $45 billion for the term, in an effort to support the smooth functioning of funding markets amid coronavirus concerns.

The maximum size of the central bank’s daily overnight operations will increase to $175 billion starting Thursday, through April 13, according to the new schedule.

The Fed has been conducting repo offerings and Treasury-bill purchases in a bid to keep control of short-term interest rates and bolster bank reserves. The efforts have calmed markets since the September spike that took overnight repo rates as high as 10%, and helped quell concern about a potential cash crunch at the end of 2019.

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The Federal Reserve Bank of New York said it will increase its repurchase operations further starting with Thursday's overnight offering, while adding term actions.It announced a schedule for 14-day term repo operations for March 12 to April 9. The largest will have a...
fed, one, day, repo, virus
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2020-45-11
Wednesday, 11 March 2020 03:45 PM
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