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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)

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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.
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