The interest rates charged on short-term credit issued to depository institutions by the Federal Reserve Banks, and paid on institutions’ reserve balances at the banks, were raised late last month in conjunction with the quarter-point increase approved for the federal funds rate.
The rate changes were published in the Federal Register Wednesday and were applicable on July 27.
The Federal Reserve Board revised its Regulation A (extensions of credit by Reserve Banks) to reflect a 0.25% increase in the primary credit rate to 5.5%; the secondary credit rate, which changes by formula with changes in the primary credit rate, rose 0.25% to 6%.
The Fed also revised its Regulation D (reserve requirements of depository institutions) to reflect a 0.25% increase to 5.4% in the rate to be paid on reserve balances maintained at the Reserve Banks.
The federal funds rate target was increased 0.25% on July 26 to a range of 5.25% to 5.5%.