The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Federal R eserve Bank OF DALLAS W ILLIA M H. W ALLACE FIRST V IC E PR ES ID EN T AND C H IE F O PER ATING O FFICER November 27, 1990 DALLAS, TEXAS 7 5 2 2 2 Circular 90-88 TO: The Chief Executive Officer of each member bank and others concerned in the Eleventh Federal Reserve District SUBJECT Restructuring of Interest Rates Charged on Borrowing from the Discount Window for Seasonal Credit DETAILS The Federal Reserve Board of Governors announced on 1990, a restructuring of interest rates for seasonal credit. rate charged on seasonal credit will be a market-related rate basic discount rate. The new structure will become effective 1992. November 7, The interest instead of the on January 9, ATTACHMENT A copy of the Board’s press release is attached. MORE INFORMATION For further information, please contact Jesse D. Sanders or Finlay R. Higgins at (214) 651-6240. For additional copies of this circular, please contact the Public Affairs Department at (214) 651-6289. Sincerely yours, For additional copies of any circular, please contact the Public Affairs D epartm ent at (214) 651-6289. Bankers and others are encouraged to use the following toll-free num ber in contacting the Federal R eserve Bank of Dallas: (800) 333-4460. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) • ••ofC O w .'--. FEDERAL RESERVE press release For immediate release November 7, 1990 The Federal Reserve Board today announced a restructuring of interest rates that are charged on borrowings from the discount window for seasonal credit. The new structure will become effective on January 9, 1992. Seasonal credit is designed to make funds available at the discount window to small and mid-sized agricultural banks that do not have access to the national money markets. It is also used to some extent by banks in resort areas. A typical use of the program is to fund farmers over the planting and production cycle. Under the restructuring, the interest rate charged on seasonal borrowings will be a market-related rate instead of the basic discount rate which was charged on this type borrowing in past years. The rate will be based on the level of the federal funds rate and the rate in the secondary market for 90-day certificates of deposit. Under current conditions, this rate would be 8.05 percent. No change was made in the basic discount rate for adjustment credit which is currently 7 percent. During 1990, more than 700 banks have borrowed under the seasonal program. The largest amount of seasonal credit outstanding during any one week in 1990 was $445 million during the week ended August 29, 1990. Historically, the largest amount of seasonal credit outstanding during any one week was $513 million during the week ending July 26, 1989. -0 -