The U.S. commercial paper market shrunk for the first time in nine weeks, as companies closed their books on 2008.

For the week that ended Dec. 24, the total commercial paper market shrank by $6.9 billion on a seasonally adjusted basis, according to data released Monday by the Federal Reserve banks. In the previous week that figure was up $8.3 billion.

Market participants have said the market, which companies use to fund everyday needs such as rent and payroll, is "winding down" at this time of the year.

Before the launch of the Fed's Commercial Paper Funding Facility in October, this market had shrunk by $366 billion over six weeks. The decline was driven by money market funds, which were holding on to their cash for fear of redemptions.

Analysts have said that it will be difficult to unwind this process and that the program may be extended past April, when it is scheduled to end.

Even so, the Fed's support has improved the market. Companies that had been unable to access crucial short-term funding now are able to raise capital. This has in turn helped reduce their reliance on other, more expensive sources of money such as bank lines. The size of the market is now $1.7 trillion, still down from its peak of $2.2 trillion in July of last year.

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