Fed adopts single interest rate for reserves

US Fed
US Federal Reserve

The US Federal Reserve said on June 2 that it would impose a single interest rate for reserve accounts, eliminating a distinct payment for excess reserves.

The new unified rate, the interest rate on reserve balances (IORB), is set to come into force on July 29. The Fed also announced it would “simplify the formula” for the calculation of interest on “master accounts at Federal Reserve banks”.

Currently, the Fed technically has two different interest rates on required reserves (IORR) and on

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