Fed ups rates of interest applied to reserve balances, primary credit

Increases of 75 basis points (bps) in the rate of interest paid on depository institutions’ reserve balances at Federal Reserve Banks and the rate banks pay on Reserve Bank primary credit took effect Oct. 7 as a result of recent Federal Reserve monetary policy action.

The Federal Open Market Committee (FOMC) on Sept. 21 raised the target rate for federal funds by 75 bps to a range of 3 to 3.25 percent. Under changes to Regulations D and A, respectively, the Fed’s rate increases for interest on reserve balances (IORB) and primary credit were adjusted up by 75 bps, rising to 3.15% and 3.25%. A trigger in Fed rules also resulted in the secondary credit rate rising to 3.75%, the Fed said in  notices published Friday.

The IORB, primary credit, and secondary credit rate increases were made effective Oct. 7 and applicable on Sept. 22, the notices state.

Reg D revision (Federal Register notice)

Reg A revision (Federal Register notice)