Interest on Reserve Balances (IORB) is the rate FED pays banks on their excess reserves
Illya Gerasymchuk
Interest on Reserve Balances (IORB) is the rate FED pays banks on their excess reserves
commercial banks have reserve accounts at the FED. regulations define the minimum amounts - any excess earns the IORB interest rate set by the FED
the 4 key interest rates set by the FED are:
1️⃣ Overnight Reverse Repo Rate (ON RRP)
2️⃣ Interest on Reserve Balances (IORB)
3️⃣ Discount Rate - also known as Lending Rate
4️⃣ Standing Repo Facility (SRF)
we'll cover them in this order below