Borrowed reserves negative

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Reference no: EM1313710

The Federal Reserve's 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 non-borrowed and borrowed reserves has changed drastically in the past nine months. For example:

In November 2007, total reserves were $42,679 million, non-borrowed 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, non-borrowed reserves were minus$98,981 million and borrowings from the Fed were $143,950 million.

Explain what the Fed did to make non-borrowed reserves negative. Also explain why the Fed did this.

Reference no: EM1313710

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