Reserve requirements for banks will remain at zero in 2024, the Federal Reserve said late Monday, but some technical details will change, the agency added.
The Fed, each year, is required by law to issue the annual indexing for the reserve requirement exemption – even if it doesn’t change. The Fed last changed the reserve requirement, to zero, in February 2021.
“If reserve requirement ratios were not zero, the reserve requirement exemption amount and the low reserve tranche would be used to determine the reserve requirement ratios that could apply to a depository institution,” the Fed said in its release.
Again, even though the requirement is set at zero, the Fed calculated some numbers as to what the requirement would be if it weren’t a goose egg. In dollar terms, the Fed said, for 2024 the reserve requirement exemption amount will be set at $36.1 million, unchanged from 2023, and the low reserve tranche will be set at $644.0 million, down from $691.7 million in 2023.
Those amounts were derived using formulas specified in the Federal Reserve Act and will apply beginning Jan. 1, 2024, the agency noted – if the requirement weren’t 0.