NEW YORK (Reuters) - What U.S. banks charge each other to borrow reserves overnight was unchanged for a third straight session on Monday, signaling some stability in money markets after last week’s turmoil, data from the New York Federal Reserve released on Tuesday showed.
The effective, or average, interest rate on what banks charge each other to borrow reserves overnight USONFFE= in the federal funds market stood at 1.90% on Monday, matching Friday’s level.
This interbank borrowing cost is what the Federal Reserve monitors to ensure it is meeting its interest rate goal.
The amount of fed funds traded increased to $74 billion on Monday, the highest since Aug. 1.
Reporting by Richard Leong, mEditing by William Maclean