Description
The Interest Rate on Reserve Balances (IORB) is the interest rate that banks earn on funds deposited with the Federal Reserve. Prior to 2020, the Federal Reserve (Fed) differentiated between the Interest on Required Reserves (IORR) and the Interest on Excess Reserves (IOER). However, due to the impact of the COVID-19 pandemic in 2020, the Fed eliminated the reserve requirement. Given that both the IORR and IOER rates were at 0%, the Fed consolidated these two rates into a single rate, the IORB, in 2021.