US Fed awards most reverse repos in 2 weeks

[NEW YORK] The Federal Reserve awarded US$136.36 billion of one-day fixed-rate reverse repurchase agreements on Monday to 47 bidders at an interest rate of 0.05 per cent, the New York Fed said on its website.

This was the highest amount in two weeks when it was US$156.56 billion on Oct 5.

On Friday, the Fed allotted US$123.64 billion in three-day reverse repos to 40 bidders, including Wall Street dealers, money market mutual funds and mortgage finance agencies, also at an interest rate of 0.05 per cent.

The overnight interest rate in the repurchase agreement, or repo, market was last quoted at 0.15 to 0.20 per cent, compared with 0.20 per cent on Friday, according to ICAP.

In the repo market, money funds and other investors make short-term loans to banks and Wall Street dealers. Banks and dealers pledge Treasuries and other securities as collateral.

REUTERS