Fed balance sheet rises back above $2 trillion

NEW YORK (Reuters) - The U.S. Federal Reserve's balance sheet rose back above $2 trillion after dipping below that level earlier this month, bolstered by increased holdings of agency mortgage-backed securities, Fed data showed on Thursday.

The Federal Reserve's balance sheet -- a broad gauge of the U.S. central bank's lending to the financial system -- rose to $2.057 trillion on July 15 from $1.977 trillion on July 8.

The Fed's holdings of agency mortgage-backed securities rose to $526.42 billion on July 15 from $462.45 billion the previous week.

Fed holdings of U.S. Treasuries totaled $684.03 billion on July 15, up from $673.50 billion on July 8.

The Fed's Term Asset-Backed Securities Loan Facility (TALF) on July 15 was $30.12 billion, up from $24.87 billion the previous week.

Banks' overall borrowings averaged $111.89 billion per day in the week ended July 15, down from an average $116.37 billion per day the previous week.

Banks' primary credit discount window borrowings averaged $34.46 billion per day in the latest week, down from $34.97 billion the previous week.

Net portfolio holdings of the Fed's Commercial Paper Funding Facility, which is buying three-month top-rated CP to free up this key area of short-term lending, were $111.05 billion on Wednesday, down from $112.89 billion on July 8.

(Reporting by Chris Reese; Editing by Chizu Nomiyama)