Interest in the Federal Reserve Board's third term-loan auction declined as 56 bidders vied for $30 billion of funds compared with 73 bidders for the $20 billion auctioned off in the previous auction on Dec. 20.
The central bank said Tuesday that the latest auction, held Monday, resulted in bids totaling $55.5 billion. The 28-day loans carry a 3.95% interest rate. The Dec. 20 auction's bids totaled $57.66 billion. The rate on those 35-day loans was 4.67%.
The Fed plans to auction another $30 billion on Jan. 28. No further auctions are scheduled, but Fed Chairman Ben Bernanke said last week that they have been helpful and may become permanent.
The central bank developed the auctions after bankers shied away from using the discount window.
