ECB Pumps 42.24 billion Euros into Money Market

The European Central Bank pumped fresh cash into the banking sector on Thursday to ease fears of a global credit squeeze, as its directors sat down to decide whether to change eurozone interest rates.

In a "quick tender" that provided funds to commercial banks for one day, the ECB made 42.24 billion euros (57.4 billion dollars) available at a marginal, or lowest, rate of 4.06 percent and a weighted average rate of 4.13 percent, the bank said.

That was only slightly lower than the 47 billion euros injected on August 13 amid a global financial market storm that was sparked by a crisis in the US market for high-risk mortgages, also known as the subprime market.

Four days earlier, the ECB had pumped a record amount of 94.8 billion into the markets.

Since early August, central banks worldwide have injected massive amounts of cash into money markets to ensure that commercial banks continue extending the credit businesses need to function normally.

On Wednesday, the bank had warned that markets were still volatile, and added: "Should this persist tomorrow (Thursday), the ECB stands ready to contribute to orderly conditions in the euro money market."

The ECB, known as the guardian of the euro, held its regular monthly rate-setting meeting Thursday to mull changes to its main lending rate, which currently stands at 4.0 percent.

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