NEW YORK, Dec 15 (Reuters) - The U.S. Federal Reserve on Monday awarded $50 billion in term reverse repurchase agreements in the second of four weekly test operations in an effort to see how the tool might be used when it decides to tighten monetary policy.
The central bank will pay Wall Street dealers, money market funds, mortgage finance agencies and other qualified participants a “stopout” interest rate of 0.07 percent for the 21-day reverse repos (RRP) due on Jan. 5, 2015, the Fed said via the New York Federal Reserve website.
Bids submitted at the stopout rate were awarded about 94 percent of the amount submitted, it said.
Sixty-eight participants submitted $75.1 billion worth of bids, with 45 of them receiving awards, the Fed said.
Last week, the Fed awarded $50 billion in 28-day term RRP at a stop-out rate of 0.08 percent. Forty of 71 participants submitted $101.93 billion worth of bids, equivalent to 92 percent of the submitted bids.
For more details, see (Reporting by Richard Leong)