NEW YORK (Reuters) - The Federal Reserve's reverse repurchase facility on Monday attracted $486.1 billion in cash, a record high, with financial institutions lending to the U.S. central bank at a 0% interest rate in a sign there are few investment options available in a low yield environment.
The financial market has been awash in cash over the last few months given the Fed's asset buying program and the U.S. Treasury's payments to various institutions, entities, and individuals for pandemic relief.
That cash has found its way to the reverse repo facility launched in 2013 to mop up excess liquidity in the repo market.
Together with other deposits, the Fed has been draining more than $500 billion per day in bank reserves, according to Barclays.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chris Reese)