WASHINGTON (MNI) – The following is the text of a statement by the
Federal Reserve Friday regarding plans to hold three small-value
auctions of term deposits over the next two months. The release says the
auctions are a matter of ‘prudent planning’ and will have no near-term
implications for monetary policy:
The Federal Reserve has scheduled three small-value auctions of
term deposits through its Term Deposit Facility (TDF) over the next two
months. These auctions are a matter of prudent planning and have no
implications for the near-term conduct of monetary policy.
All term deposit auctions will use a single-price format in which
all winning bids will be awarded at the highest rate accepted at the
auction. The first auction will offer $1 billion of 14-day term
deposits; the auction will be conducted on June 14 with settlement on
June 17, and the deposits offered will mature on July 1.
Each participating institution may submit up to three competitive
bids; the maximum award to any individual bidder will be set at $250
million and the maximum rate at the auction will be set at the primary
credit rate. Depository institutions may submit noncompetitive bids;
each individual noncompetitive bid will be filled up to a limit of $5
million at the highest rate accepted in the competitive auction. The
amounts awarded to noncompetitive bidders will be added on to the $1
billion offered at the competitive auction.
The second auction will offer 28-day term deposits; the auction
will be conducted on June 28 with settlement on July 1, and the deposits
offered will mature on July 29. The third auction will offer 84-day term
deposits; the auction will be conducted on July 12 with settlement on
July 15, and the deposits offered will mature on October 7. The amount
of term deposits offered along with other parameters for the second and
third auctions will be announced at a later date.
The Federal Reserve may schedule up to two additional small-value
TDF auctions later in the summer.
** Market News International Washington Bureau (202) 371-2121 **