NEW YORK: The US Federal Reserve added $50 billion in temporary reserves to the banking system on Tuesday, according to the New York Federal Reserve web site. Earlier on Tuesday, the Fed said it would arrange a big overnight repurchase agreement and was ready to arrange further operations later in the day as needed.
As the fallout from Lehman Brothers' collapse at the weekend continued to infect financial markets, the interest rate banks demanded for lending dollars overnight to other institutions ballooned to more than five times the US Federal Reserve's 2 percent target rate. London interbank offered rates (Libor) for overnight dollars as fixed by the British Bankers Association -- which trillions of dollars of derivative, financial and corporate contracts are referenced against -- soared to 6.43750 percent, the highest since January 2001. "In addition, at around 9:30 a.m. (EDT) the Desk will conduct its typical Tuesday morning $20 billion, 28-day single-tranche repo, settling 1-day forward," the New York Fed said in a statement on its Web site. After the operation, federal funds traded in the US interbank market slipped to 2.0 percent, matching the target rate the Federal Reserve sets, from 3.0 percent earlier on Tuesday. http://economictimes.indiatimes.com/News/Fed_arranges_50_bn_repo_add_stands_ready_for_more/articleshow/3490526.cms Credit is a system whereby a person who can't pay gets another person who can't pay to guarantee that he can pay. - Charles Dickens --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
