NEW YORK: The interest that US banks charge each other to borrow reserves overnight fell to 2.39% on Thursday from 2.40% the day before, while most other money market rates also declined, according to New York Federal Reserve data released on Friday.

The average, or effective, federal funds rate's premium above the interest the Federal Reserve pays banks on excess reserves (IOER) fell to 4 basis points from 5 basis points on Wednesday.

The increase in borrowing costs on Wednesday likely stemmed from investors paying for the $84 billion in Treasury supply at last week's quarterly refunding.

Before Wednesday, the effective fed funds rate had fallen in reaction to the US central bank's adjustment earlier this month on the IOER in a bid to keep a lid on the fed funds rate from hitting the upper range of its target range, currently at 2.25%-2.50%.

Among other money market rates, the Secured Overnight Finance Rate (SOFR), which gauges what the borrowing costs in the repurchase agreement market, fell to 2.43% on Thursday from 2.48% the day before.

The Overnight Bank Funding Rate, which includes fed funds trades, some Eurodollar transactions and some domestic deposit deals, decreased to 2.38% on Thursday from 2.39%.

On the other hand, the London interbank offered rate (LIBOR) on three-month dollars rose 0.22 basis point at 2.52188%.

LIBOR is the benchmark rate for $200 trillion worth of dollar-denominated financial products, mainly interest rate swaps and floating-rate loans.