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Federal Reserve issues final rules reflecting credit and interest rate increases
On January 31, the Federal Reserve Board (Fed) published a final rule amending Regulation A (Extensions of Credit by Federal Reserve Banks) to reflect its December 19 approval of a one-quarter percent increase, from 2.75 percent to 3 percent. Additionally, because the formula for the secondary credit rate incorporates the primary rate, the secondary credit rate also increased by one-quarter percentage point, from 3.25 percent to 3.5 percent. The rate changes took effect on January 31, but were applicable on December 20, 2018.
The same day, the Fed also issued a final rule amending Regulation D (Reserve Requirements of Depository Institutions) to reflect approval of a 0.20 percentage point increase to the “rate of interest paid on balances maintained to satisfy reserve balance requirements (“IORR”) and the rate of interest paid on excess balances (“IOER”), both now at 2.4 percent, maintained at Federal Reserve Banks by or on behalf of eligible institutions.” The rate changes took effect on January 31, but were applicable on December 20.