After announcing Friday that it would increase liquidity, the Federal Reserve Board said Monday that it had knocked the interest rate on borrowing from its term loan auction to 2.39%.
The Fed's first auction on Dec. 17 carried a 4.65% rate, but that rate has steadily declined since then. The central bank's most recent sale on Feb. 25 carried a rate of 3.08%.
As the credit markets continued to seize up last week, the Fed said it would boost its two liquidity sales this month by $20 billion, to $50 billion, and possibly higher if conditions deteriorate further.
The central bank also plans to begin term loan repurchases that could pump $100 billion into the market.
