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NEW YORK, June 30 The Federal Reserve awarded a
record amount of reverse repurchase agreements to banks, money
market funds and mortgage finance agencies on Monday, according
to the New York Federal Reserve.
Investors piled money with the U.S. central bank on Monday
as they looked for a safe place to store their cash as the
second quarter comes to a close.
The U.S. central bank has ramped up testing of its
fixed-rate reverse repo program which it created to help achieve
its interest rate target when it decides to move away from its
current near-zero rate policy.
The central bank on Monday issued $339.5 billion of these
overnight loans to 97 bidders to whom it will pay an overnight
rate of 0.05 percent, the New York Fed said on its website.
This was more than double the $140.9 billion the Fed awarded
The prior peak for the Fed's reverse repos awarded was
$242.1 billion to 93 bidders on March 31, the last business day
of the first quarter, New York Fed data showed.
Analysts expected the daily demand for the Fed's reverse
reps to subside after the new quarter begins.
"It's mostly quarter-end related. People are looking to
clean up their balance sheets," said Gennadiy Goldberg, interest
rate strategist with TD Securities in New York.
(Reporting by Richard Leong; Editing by James Dalgleish and