FXStreet (Mumbai) - Contrary to other central banks, the Federal Reserve's (Fed) main policy committee does not set a precise level at which these overnight loans are made, but rather, a range - this has been set between 0% and 0.25% since December 2008.

Changing the range at which the fed funds may be borrowed, has for many years been the main tool with which the Fed influenced monetary policy, and thus one of the most important benchmarks in capital markets.

Now, the New York Fed wants to change the way it compiles data and calculates the fed funds rate, in order to comply with international standards and to limit the scope for manipulation.

"The New York Fed intends to enhance the federal funds rate calculation process by transitioning the data source from data supplied by federal funds brokers to transaction-level data, collected directly from depository institutions."

Gathering the data directly from the trading parties will help the Fed to capture a greater share of federal funds activity than brokered data alone would. Also, the Fed will get a larger base of transactions for the calculation of the effective fed funds rate.

"This change is solely intended to make the calculation process more robust," the New York Fed wrote in a statement on Monday. The Fed began collecting these figures from certain banks in April of last year via the " FR2420" reporting form.