| |
| |
![]() |
| |
|
| |
|
| |
|
FRANKFURT : The European Central Bank said Wednesday it had pumped 100 billion dollars (73.7 billion euros) back into interbank money markets in one-day loans.
The ECB also provided one-week dollar loans at a fixed rate of 2.277 percent, with banks signing on for a total of 170.9 billion dollars.
The dollar operations have become regular events aimed at keeping the US currency flowing through the vital global financial pipeline.
Eurozone commercial banks paid an average of 1.94 percent for the one-day, or so-called "overnight" US funds, which the ECB got from the US Federal Reserve through a reciprocal currency exchange known as a swap.
Banks had bid for a total of more than 120 billion dollars in that operation, the ECB said, indicating sustained demand for the US currency.
On Monday, the ECB said it would provide an unlimited amount of dollars to eurozone banks in one-week, one-month, and three-month loans at a fixed rate of interest that economists said should serve to calm tension on the markets.
The US currency has been lent on a daily basis since September 18.
Money 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 mortgages and personal loans.
Commercial banks normally lend and borrow cash from each other on interbank markets but these have dried up since the US market for high-risk, or subprime, mortgages collapsed more than a year ago.
The ECB and other major central banks have been providing huge amounts of cash in the form of loans in all major currencies to ease turmoil stemming from the latest crisis in the US financial sector.
That began when the investment bank Lehman Brothers declared bankruptcy on September 15.
- AFP/vm
|
