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US fed funds rate hits highest since December 2008

[NEW YORK] The US interest rate that the Federal Reserve targets to achieve its monetary policy touched its highest level on Friday since the height of the global credit crisis, following Britain's stunning vote to leave the European Union.

Thursday's referendum on Britain's membership in the economic bloc threw financial markets into turmoil as investors fretted about the global fallout, including on the British banks.

The average, or effective, fed funds rate was 0.40 per cent, up from 0.39 per cent on Thursday. It traded in a range of 0.38 per cent to 0.56 per cent, with US$70 billion in this type of interbank loan changing hands, the New York Federal Reserve said on Monday.

On Thursday, the trading range was 0.37 per cent to 0.56 per cent, with US$71 billion changing hands.

Meanwhile, the Fed's overnight bank funding rate was 0.40 per cent on Friday, up from 0.39 per cent on Thursday.

This rate, calculated using fed funds and certain Eurodollar transactions, is intended as a broader measure of unsecured borrowing in US money markets.

These transactions changed hands at 0.05 per cent to 0.47 per cent on Friday, compared with Thursday's range of 0.27 per cent to 0.47 per cent.

The New York Fed said Friday's rate was based on US$248 billion worth of loans, compared with US$244 billion on Thursday.