ON RRP further reinforces the the floor for the market-wide interest rates
Illya Gerasymchuk
ON RRP further reinforces the the floor for the market-wide interest rates
since it's accessible to a broader set of financial institutions - not only banks. those now also have little incentive to lend below the ON RRP rate
Overnight Reverse Repo Rate (ON RRP) defines the rate at financial institutions can lend money overnight to the FED
in return the FED provides treasury bonds as a collateral
ON RRP is accessible to both banks & non-banks (e.g. money market funds)
