NY Fed Lifts Repo Rate to 5 Bps
The Federal Reserve Bank of New York issued a "Statement to Revise Terms of Overnight Fixed-Rate Reverse Repurchase Agreement Operational Exercise", which says, "As noted in the September 20, 2013, Statement Regarding Overnight Fixed-Rate Reverse Repurchase Agreement Operational Exercise, the Open Market Trading Desk at the Federal Reserve Bank of New York has been conducting daily, overnight fixed-rate reverse repo operations as part of an operational readiness exercise. Beginning with the operation to be conducted on Wednesday, February 26, the fixed rate offered in these operations will be increased from four basis points to five basis points. All other terms of the exercise will remain the same. As an operational readiness exercise, this work is a matter of prudent advance planning by the Federal Reserve. These operations do not represent a change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future." In other news, see The Malaysia Star's "China banks hit back as Internet finance muscles into their business", which says, "China's brick-and-mortar banks are launching a counter-attack against the assault on their business from Alibaba and other Internet heavyweights, in a bid to staunch the outflow of bank deposits into high-yielding online investment products. In less than eight months, Alibaba Group Holding Ltd's money market fund, Yu'e Bao, has attracted 400 billion yuan (US$66bil) in assets under management, more than the customer deposits held by the five smallest listed Chinese banks. Similar online products from Baidu Inc and Tencent Holdings Ltd also contributed to a fall of one trillion yuan in traditional bank deposits in January."
