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Nonborrowed Reserves

   Also found in: Acronyms 0.01 sec.
Nonborrowed Reserves
The portion of a bank's reserves that has not been borrowed from a discount window at the Federal Reserve. One calculates the nonborrowed reserves by adding all deposits the bank has at the Federal Reserve to its cash on hand and subtracting its borrowed funds. Nonborrowed reserved are calculated each week.


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In September, the Bank of Mexico added 100 billion pesos to the amount by which it leaves the banking system "short" of nonborrowed reserves.
As Friedman (1983, 1984) has argued, the heightened variability of money growth corresponding to the Federal Reserve's October 1979 shift to nonborrowed reserves targeting, generated uncertainty about monetary policy.
Between October 1979 and October 1982, the Fed officially switched from targeting an interest rate instrument to targeting nonborrowed reserves.
 
 
 
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