March 21, 2019 / 1:38 PM / 3 months ago

U.S. effective fed funds rate rises above interest on reserves

NEW YORK, March 21 (Reuters) - The average borrowing cost for U.S. banks to borrow excess reserves from each other rose above what the Federal Reserve pays on excess reserves for the first time ever on Wednesday, New York Federal Reserve data released on Thursday showed.

The average or “effective” federal funds rate came in at 2.41 percent on Wednesday, higher than the 2.40 percent interest rate the U.S. central bank pays on the excess reserves that banks leave with it. (Reporting by Richard Leong Editing by Chizu Nomiyama)

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