Fed offers extra $30bn to central banks

25 September 2008

The US Federal Reserve is to pump money in to several other central banks.

Around $30 billion has been made available to the Swedish, Danish, Norwegian and Australian central banks, in order to improve market liquidity.

It is hoped that the move will encourage inter-bank lending and therefore stave off some of the worst effects of the recent volatility in the financial system.

Commercial financial firms in the four nations can now borrow from the Fed funding, in order to help them meet their running costs.

Central banks in the UK, Japan and the Eurozone, along with the Fed, made a total of $180 billion available to the market last week for the same purpose.

The deal has been praised by the Danish central bank, the Nationalbanken.

"These facilities, like those already in place with other central banks, are designed to improve liquidity conditions in global financial markets," it said in a statement.

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