Federal Reserve Board Announces Annual Indexing of Reserve Requirement Exemption Amount and Low Reserve Tranche for 2023

The Federal Reserve Board on Tuesday announced technical details related to reserve requirements for depository institutions. The annual indexation and publication of these amounts are required by law and does not indicate a change in depository institutions' reserve requirements, which will remain zero.

If reserve requirement ratios were not zero, these amounts would be used to determine the different ranges of reserve requirement ratios that could apply, depending on the amount of transaction account balances at a depository institution. The reserve requirement exemption amount will be set at $36.1 million, up from $32.4 million in 2022, and the low reserve tranche will be set at $691.7 million, up from $640.6 million in 2022. The adjustments to both of these amounts are derived using formulas specified in the Federal Reserve Act.

The adjustments will apply beginning January 1, 2023.

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