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describe what the Fed did to make non borrowed reserves negative.

The Federal Reserves publishes the H.3 Statistical Release-Aggregate Reserves of Depository Institutions and the Monetary Base-weekly. Recent releases show that the composition of the supply of total reserves, between nonborrowed and borrowed reserves has changed drastically in the past nine months. For ex:

In November 2007, total reserves were $42,679 million, nonborrowed reserves were $42,313 million, and borrowings from the Fed were $365 million.

In contrast, in the first week of April 2008, total reserves were $44,969 million, nonborrowed reserves were minus$98,981 million and borrowings from the Fed were $143,950 million.

Elucidate what the Fed did to make nonborrowed reserves negative. Also describe why the Fed did this.

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M920438

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