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Fed makes technical adjustments to keep benchmark interest rate within target range

·1 min read

June 16 (Reuters) - The U.S. Federal Reserve on Wednesday made technical adjustments aimed at keeping its key overnight benchmark interest rate from falling too low.

The Fed raised the interest rate it pays banks on reserves held at the U.S. central bank at the end of a two-day policy meeting. It also lifted the rate it pays on overnight reverse repurchase agreements, a tool used to set a floor on short-term interest rates.

The rate on reserves - known by the acronym IOER - will rise by five basis points to 0.15%. The rate paid on reverse repo operations, which gives financial firms a place to temporarily park cash in exchange for a return, will increase to 0.05% from zero. (Reporting by Jonnelle Marte Editing by Paul Simao and Chris Reese)