March 3 (Reuters) - The cost of borrowing overnight in the U.S. overnight repurchase agreement market was elevated on Tuesday for the second day, after the Federal Reserve saw strong demand for its overnight and term repo operations.
The overnight repo rate was 1.80%, above the Fed’s target range for the federal funds rate of 1.50% to 1.75%.
The Federal Reserve has pumping liquidity into the market in a bid to avoid a spike in borrowing rates like last September, when demand for the short-term loans overwhelmed supply.
It saw strong demand for the loans on Tuesday. It accepted $100 billion at an operation for overnight loans. A 14-day repo operation was significantly oversubscribed with the Fed accepting $20 billion from $70.95 billion in bids. (Reporting By Karen Brettell)