The FED made a new arrangement for banks called BTFP (Bank Term Funding Program) that banks can use to replace their dependence on RRP. So the money that had banks had been getting from the Overnight reverse repo is now balanced with the money they can get with BTFP . Kind of like a buffet line at a pot luck, instead of everyone going on one side of the table, they can go on both sides but they are still getting fed from the same crockpot.
EDIT: I’ve been corrected. Banks were not the primary users of RRP to begin with. Leaving this up due to all the comments. BTFP started in March 23 and accounts for 110B in loans to banks. The RRP dip is ~ 521B for the same time frame so could only account for 1/5 of the dip if it was apples to apples which it isn’t.
by pickle-jones