From what I read, rrp is getting lower because banks are getting more interest buying treasuries from the treasury (and other places).

The rate offered at the rrp facility is supposed to be the lowest rate on offer, setting the floor for others. Back in 2022 when the rrp spiked up to $2.7 trillion, the treasury and others were not offering a much better rate for their bonds, so banks didn't have much reason to put their money anywhere else.

Also, I think there is some duration risk in buying a low interest bond in 2022, whereas parking money at the rrp wasn't carrying that risk. I think a the fact that the rrp is getting drained is a sign that banks don't think treasuries at today's higher interest rates carry as much duration risk.

But I should probably ask Mathilde about this.