April 1, 2019 / 1:58 PM / 6 months ago

MONEY MARKETS-U.S. IOER, fed funds rate gap widens to record

NEW YORK, April 1 (Reuters) - The gap between the average borrowing cost for U.S. banks to borrow excess reserves overnight and what the Federal Reserve pays on excess reserves (IOER) increased to its biggest ever on Friday, according to New York Federal Reserve data on Monday.

The average or “effective” federal funds rate rose to 2.43 percent, which was 3 basis points above the interest rate the U.S. central bank pays on the excess reserves that banks leave with it..

Last Thursday, the effective fed funds rate rose to 2.41 percent. (Reporting by Richard Leong; Editing by Steve Orlofsky)

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