Fed Adds $102.44 Billion to Financial System in Latest Repo Transactions
November 19 2019 - 10:19AM
Dow Jones News
By Michael S. Derby
The Federal Reserve Bank of New York added $102.44 billion in
temporary liquidity to the financial system Tuesday.
The intervention came in two parts. One was via overnight
repurchase agreements, or repos, that totaled $78.3 billion, and
via a 14-day repo that totaled $24.14 billion. In both operations,
eligible banks took less liquidity than the Fed offered.
Fed repo interventions take in Treasury and mortgage securities
from eligible banks in what is effectively a short-term loan of
central-bank cash, collateralized by the securities.
The Fed's interventions are aimed at ensuring that the financial
system has enough liquidity and that short-term borrowing rates
remain well-behaved, with the central bank's federal-fund rate
staying within the 1.5%-to-1.75% target range. The effective
fed-funds rate stood at 1.55% on Monday. The broad general
collateral rate for repo trading stood at 1.52%, also for
Monday.
Write to Michael S. Derby at michael.derby@wsj.com
(END) Dow Jones Newswires
November 19, 2019 10:04 ET (15:04 GMT)
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