(Bloomberg) — The amount of money investors are holding up in a major central bank facility has risen to another all-time high as supply-demand imbalance continues to hamper US dollar funding markets.
On Monday, 81 participants placed a total of $1.758 trillion into the Federal Reserve’s overnight reverse repurchase agreement facility, where counterparties such as money market funds can deposit cash with the central bank. This exceeded the previous record size of $1.705 trillion from December 17, data from the Federal Reserve Bank of New York shows.
The demand for the so-called RRP rose further as capital and interest payments from government-sponsored companies entered the short-term financing markets. However, that cash is expected to come out of overnight space by the end of the week as the Treasury ramps up its issuance of Treasuries now that Congress has raised the debt limit.
The overall volume has risen this year as the influx of liquidity continues to flood the US dollar funding markets due to the purchase of central bank assets and the withdrawal of the Treasury’s cash account, pushing reserves into the system. It looks like the bigger buying will continue even as the Fed scales back its asset purchase program – something it started this month – given the imbalance between supply and demand in short-term insurances.irrigationRelationships are likely to last.
Then we have the fluctuations in the Turkish lira reaching an all-time high.
Finally, the US current account balance rose to levels last seen in 2006 just after the height of the US housing bubble.