Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Fed Adds $30.8 Billion to Financial System in Latest Repo Transaction

share with twitter share with LinkedIn share with facebook
share via e-mail
0
10/09/2019 | 09:55am EDT

By Patrick Thomas

The Federal Reserve Bank of New York added $30.8 billion to the financial system Wednesday, using the market for repurchase agreements, or repo, to relieve funding pressure in money markets.

Banks asked for $30.8 billion in overnight reserves, all of which the Fed accepted, offering collateral in the form of Treasury and mortgage securities.

In the repo market, borrowers seeking cash offer lenders collateral in the form of safe securities -- frequently Treasury bonds -- in exchange for a short-term loan. The term of these loans can be as short as overnight.

When the Fed adds money to the financial system through the repo market, it is acting as a lender. In typical repo market transactions, lenders can include money-market mutual funds, banks or hedge funds that are seeking to earn a slightly higher rate of interest than what is available from holding very short-term government securities. The borrowers are often banks, securities firms or hedge funds that use the cash to finance positions in the market.

Banks and hedge funds borrow or lend depending on their needs and investment goals.

The Fed began offering repo loans last month after a shortage of available cash in the financial system led repo rates to climb as financial companies scrambled for overnight funding. The actions marked the first time since the financial crisis that the Fed had taken such actions.

Last week, the Fed said it would extend its scheduled repo lending through Nov. 4. It said it would continue to offer overnight repos, which are meant to relieve funding pressure in money markets, for an aggregate amount of at least $75 billion each night through Nov. 4.

The Fed said it would extend its two-week repo loans as well. It plans to offer at least $45 billion between Oct. 8 and Oct. 11. After that, the amount available will drop to $35 billion through Oct. 29.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Economy & Forex"
07:29p2019/10/18PREMIER : Govt to keep tight budget
PU
07:21pItaly's draft 2020 budget may require some work, but no crisis seen - EU
RE
07:19pFACEBOOK : Libra cryptocurrency faces new hurdle from G7 nations
RE
07:09pCEPR CENTER FOR ECONOMIC AND POLICY RESEARCH : New Report Reviews Changes in Bolivia's Economy under Evo Morales's Presidency
PU
07:07pChina's GDP growth to grind to 27-1/2 year low as tariffs hit demand
RE
06:54pCORY GARDNER : Gardner, Foreign Relations Committee Leaders Announce New Comprehensive Syria-Turkey Legislation
PU
06:49pTONY CÁRDENAS : Cárdenas Statement on Trump Decision to Host G-7 Summit at His Doral Resort
PU
06:47pAT&T's Xandr purchases TV advertising company clypd - source
RE
06:47pGoldman wants traders to be more like dealmakers and coders
RE
06:46pEU budget rules guardian wants them simpler, focussed on cutting debt
RE
Latest news "Economy & Forex"