20 March 2008, 18:37  NY Fed adds 30 bln usd

The New York Federal Reserve Bank has added 30 bln usd to the US financial markets today, replacing liquidity its Wednesday operations took out of the system. The Fed added 5 bln usd in 14-day repurchase agreements and 24 bln usd in 7-day repos. The 30 bln usd injection "was within or expectations", said Wrightson ICAP analysts. The 7-day repurchase agreement was longer than usual to get the Fed through the Good Friday and Easter holidays during which it normally does not like to enter the markets. Yesterday the Fed sold 25 bln usd of its Treasury bills, which had the effect of withdrawing cash from the markets. There were also also 14-day and overnight repos running off today, which were partially replaced. Analysts say because of the various special lending facilities the Fed has established to stem the financial crisis in Wall Street, its daily open-market operations will be more complicated while the New York Fed tries to offset their effects on financial institution reserves and the Fed funds rate.

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