Federal Reserve To Hold Short Term Auctions
March 28, 2008
The Federal Reserve announced plans on Friday to auction US$50 billion in short term credit to banks. The plan to offer the special term auction is in aid of relieving some of the liquidity issues currently being faced by the country in international markets due to the fallout in the high risk based mortgage-backed securities market.
The normal method will be observed for these auctions, with the winning banks paying the same interest rate for their 28 day credits. The auctions have been scheduled for April 7th and 21st and the Federal Reserve have made it clear that these auctions could continue further, as long as they were required.
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