Net Borrowed Reserves


DEFINITION of 'Net Borrowed Reserves'

A statistic released in weekly Federal Reserve data showing the difference between the amount of money a bank has borrowed from the Fed and the cash reserves the bank holds above the required minimum. Net borrowed reserves is expressed as a negative number. Deposit banks are required to keep a certain amount of cash on hand at all times. If these banks don't have enough cash, they will borrow it from a Federal Reserve bank.

BREAKING DOWN 'Net Borrowed Reserves'

Net borrowed reserves can indicate a tight credit environment relative to the demand for loans and rising interest rates.

Conversely, if there is an excess of reserves in the banking system, the statistic will show net free reserves, which will be expressed as a positive number.

  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Net Free Reserves

    A statistic released in weekly Federal Reserve data showing the ...
  3. Free Reserves

    A measurement of a bank's reserves that is equal to the difference ...
  4. Fractional Reserve Banking

    A banking system in which only a fraction of bank deposits are ...
  5. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
  6. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
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