The rate of interest paid on balances depository institutions maintain with the Federal Reserve System was raised 0.05 percentage point to 0.15%, effective June 17, the Fed said in a Federal Register notice published Friday.
This change under Regulation D, affecting the interest rate paid on reserve requirements (IORR) and the rate paid on excess balances (IOER), followed the Federal Open Market Committee’s (FOMC) decision last month to maintain target range for the federal funds rate at 0 to 0.25%.
Separately, the Fed plans to replace references to the IORR and IOER July 29 with a single reference to “interest on reserve balances.” That rule change was published last month.
RR: Single reserve balance interest rate finalized (as proposed), eliminating two-rate scheme (June 2, 2021)