(Bloomberg) -- Demand for a key Federal Reserve facility used to help control short-term rates surpassed $1 trillion for the first time ever, accommodating a barrage of cash in search of a home.

Eighty-six participants on Friday parked a record total of $1.04 trillion at the overnight reverse repurchase facility, in which counterparties like money-market funds can place cash with the central bank. That surpassed the previous all-time high volume of $991.939 billion from June 30, New York Fed data show.

Demand has surged since the Fed boosted the offering rate on the facility to 0.05% from 0% last month as a flood of cash continues to overwhelm the U.S. dollar funding markets. That’s in part a result of central-bank asset purchases and drawdowns of the Treasury’s cash account, which is pushing reserves into the system.

As a result, liquidity in the funding markets has continued to swell, especially as the Treasury endeavors to reduce its cash balance to $450 billion before the debt cap is reinstated at the end of the month. This has forced the government to make additional cuts to its bill supply, further exacerbating the supply-demand imbalance and boosting the Fed’s RRP facility.

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