Due to the continued improvement in financial market conditions, the U.S. Federal Reserve Board has unanimously approved several modifications to the terms of its discount window lending programs, the Fed said Thursday.

The changes include increasing the primary credit rate (the discount rate) from 0.5% to 0.75%, and raising raised the minimum bid rate for the Term Auction Facility by 25 basis points to 0.5%.

In addition, the Fed announced that, effective March 18, the typical maximum maturity for primary credit loans will be shortened to overnight.

“Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve’s lending facilities,” it said.

These changes, “do not signal any change in the outlook for the economy or for monetary policy, which remains about as it was at the January meeting of the Federal Open Market Committee,” it says.

As such, the changes “are not expected to lead to tighter financial conditions for households and businesses”, it says.

At the last FOMC meeting, the committee left its target range for the federal funds rate at 0% to 0.25% and said it anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

Easing the terms of primary credit was one of the Federal Reserve’s first responses to the financial crisis back in 2007. More recently, in response to improving conditions in wholesale funding markets, it has begun tightening those terms again and planning to withdraw liquidity from the market.

The increase in the discount rate widens the spread between the primary credit rate and the top of the FOMC’s target range for the federal funds rate to 0.5%, which, along with the reduction in maximum maturity, “will encourage depository institutions to rely on private funding markets for short-term credit and to use the Federal Reserve’s primary credit facility only as a backup source of funds,” it says.

The Fed added that it will assess over time whether further increases in the spread are appropriate.