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US Fed throws $30 billion into foreign credit markets

Posted By admin On September 24, 2008 @ 4:04 am In Money Watch | Comments Disabled

AFP [1]
Wednesday, Sept 24, 2008

The US Federal Reserve threw another 30 billion dollars into foreign credit markets Wednesday to relieve high tension in demand for dollars, doing so-called swap deals with four central banks.

This new door giving access to dollars takes the total of such swap deals to 277 billion dollars since the global financial crisis fell into a new vortex at the beginning of last week.

The Fed said it was giving access to the extra funds to relieve “elevated pressures” in the US dollar short-term markets, revealing yet another signal of deep crisis in the global financial system.

(Article continues below)

The swaps follow other such arrangements with leading central banks which are also injecting big and continuous rolling amounts of their own money into the banking market.

The European Central Bank also made a regular refinancing Tuesday which revealed renewed tension on the European interbank market.

The Fed said the latest lines concerned 10 billion dollars with each of the Australian and Swedish central banks, and five billion dollars with each of the Norwegian and Danish central banks.

Such swaps enable financial companies abroad, including the subsidiaries of US groups, to access dollars via domestic refinancing arrangements in the local country, notably when US trading is closed for the night.

Full article here [1]

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URLs in this post:

[1] AFP: http://afp.google.com/article/ALeqM5itOHJbNrxCHKetPtXIPIbY3TalIQ

[2] Bank Funding Crunch Deepens as Swap Rates Soar: Credit Markets: http://www.prisonplanet.com/bank-funding-crunch-deepens-as-swap-rates-soar-credit-markets.html

[3] ECB Blows Up Europe? Creates ‘Super-Immune’ Elite Bonds … Throws Credit Market into Disarray: http://www.prisonplanet.com/ecb-blows-up-europe-creates-super-immune-elite-bonds-throws-credit-market-into-disarray.html

[4] Central Banks Offer Extra Funds to Calm Money Markets: http://www.prisonplanet.com/central-banks-offer-extra-funds-to-calm-money-markets.html

[5] ECB gives Hungary €5bn credit line: http://www.prisonplanet.com/ecb-gives-hungary-e5bn-credit-line.html

[6] Congressman Grayson: Fed Secretly “Stuffed” $500 Billion into “Foreign Private Pockets” and Gave $230 Billion to Citi “As a Secret Bailout”: http://www.prisonplanet.com/congressman-grayson-fed-secretly-stuffed-500-billion-into-foreign-private-pockets-and-gave-230-billion-to-citi-as-a-secret-bailout.html

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