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WASHINGTON - THE US Federal Reserve said on Tuesday it would extend by three months three emergency programmes to provide liquidity to financial markets being squeezed by the global financial crisis.
The Fed said that 'in light of continuing strains in financial markets', it would extend the three programmes through April, 30, 2009, which had been due to expire on January 30.
The central bank said that date was consistent with the term authorized for several other of its liquidity-related facilities, as well as the currency swap lines with 14 other central banks.
The liquidity programmes are: financing to primary dealers through the central bank's discount window, loans to purchase commercial paper from money market mutual funds; and auctions of Treasury securities.
Fed chairman Ben Bernanke noted on Monday that the central bank could use 'several means' to influence financial conditions 'beyond expanding our lending to financial institutions.
'This announcement is in line with Mr Bernanke's speech yesterday which emphasized the necessity of further economic policy action to address the substantial risks to financial stability and growth,' said Ms Amine Tazi, US economist at Natixis.
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