The Federal Reserve's Foreign Reverse Repo Balance Rises to Highest Since October 2022

Jin10 News, August 21 – The usage of the Federal Reserve's reverse repurchase (RRP) facility, open to foreign central banks and other monetary authorities, continues to climb, with the balance increasing for two consecutive weeks. This reflects that overseas official institutions are continuing to boost their U.S. dollar cash reserves. As of August 19, the balance of foreign entities' deposits in the Fed's reverse repo pool rose to $373 billion, up from $357 billion a week earlier. Since August 5, the tool's usage has increased by approximately $56 billion, marking the largest two-week increase since October 2022. The market is closely monitoring changes in the foreign reverse repo balance to identify whether Japan, after intervening in the foreign exchange market last month to support the yen, is now rebuilding its U.S. dollar liquidity reserves.