Demand for reverse repos jumped to a record high after the Federal Reserve decided to raise the overnight reverse repo rate.

On Thursday, 68 market participants put $756 billion into the Fed through overnight reverse repos. This broke the previous record high of $584 billion, according to the New York Fed.

Demand for the use of the Fed's reverse repo tool has been rising because of excess liquidity in the dollar financing market. The Fed's asset purchases and the Treasury's reduction of cash account balances are part of the reason for excess liquidity.

While keeping the overall target range of the federal funds rate unchanged on Wednesday, the Fed fine-tuned some of the management rates used to help control the benchmark interest rate, including a 5 basis point increase in the reverse repo rate to 0.05%, effective June 17, and an increase in the interest rate on excess reserves by 5 basis points to 0.15%.

Although the Fed's main benchmark interest rate is still stable at 0.06%, the Fed has raised the management rate because of a growing oversupply of dollars in the short-term financing market, which is driving down short-term interest rates.