Abet Chichi2

[bob3]

Fed Auctions $30 Billion
Tuesday January 15, 10:11 am ET
By Martin Crutsinger, AP Economics Writer
Fed Auctions $30 Billion to Banks to Combat Credit Crisis


WASHINGTON (AP) -- The Federal Reserve, working to combat the effects of a serious credit crisis, said Tuesday it had auctioned $30 billion in money to commercial banks at an interest rate of 3.95 percent.
It marked the third in a series of innovative auctions the Fed began last month as a way to provide cash-strapped banks with the reserves they need. The hope is that the increase in resources will keep banks lending to consumers and businesses and prevent the credit turmoil that hit in August from pushing the country into a recession.

There are indications the Fed's efforts are having an impact. The 3.95 percent interest rate was the lowest of any of the three auctions it has held. The other two auctions saw rates of 4.65 percent and 4.67 percent.