| |
| |
![]() |
| |
|
| |
|
| |
|
FRANKFURT: The European Central Bank on Tuesday pumped 50 billion dollars (37 billion euros) back into interbank money markets in what has become a daily attempt to keep cash flowing through the key financial pipeline.
The results of the ECB's one-day offer, including demand and the rate at which the dollars are lent, were to be released later in the day.
A similar operation on Monday generated brisk demand with banks requesting a total of almost 91 billion dollars and paying 4.0 percent for the money that was available, the ECB said.
The response confirmed that eurozone money markets remained under strong pressure, in particular with respect to the need for dollars.
The markets determine the availability of credit for vast numbers of people around the globe, from managers trying to fund their businesses to families and students seeking personal loans.
Commercial banks generally lend and borrow cash from each other on interbank markets but these have dried up since the US market for high-risk, or sub-prime, mortgages collapsed more than a year ago.
The ECB and other major central banks have been pumping huge amounts of cash in the form of loans to ease turmoil stemming from the latest crisis in the US financial sector, after the investment bank Lehman Brothers went bankrupt last month.
Some analysts question whether the central bank moves are working however, saying that commercial lenders soak up the extra cash but do not lend to each other or extend it as credit to businesses.
They reportedly use some of the funds to buy government treasury bills because they are presently considered one of the safest investments.
- AFP/so
|
