Foreign bank cash decline lifts fed funds rate ahead of quarter-end

By Gertrude Chavez-Dreyfuss and Laura Matthews NEW YORK (Reuters) -The effective federal funds rate - the interest banks charge each other for overnight loans to meet reserve requirements - rose unexpectedly last week ahead of quarter end, mainly on the back of shrinking cash balances at foreign banks, according to market participants. The latest fed funds rate of 4.09% was one basis point higher than the 4.08% seen after the Fed cut interest rates at the September 16-17 meeting. It's still within the ...