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LEAD: ECB to infuse 150 billion euros into money markets.

LONDON, March 28 Kyodo


The European Central Bank said Friday it will inject 150 billion euros, or about $235 billion, in additional liquidity into European money markets to support the normalization of the functioning of the euro money market.

The amount of fresh funds marks the largest since the ECB infused about 130 billion euros in mid-December.

The ECB took the measure ahead of the release of quarterly earnings by financial institutions amid the escalating credit crunch stemming from subprime mortgage woes.

The U.S. Federal Reserve also said Friday it will inject $100 billion in additional liquidity into the money market in April in a move apparently aimed at calming concerns about the credit crunch.

''The Federal Reserve will conduct two auctions of 28-day credit through its term auction facility in April,'' the U.S. central bank said in a statement.

''It will offer $50 billion in an auction to be held on Monday, April 7 and $50 billion in an auction to be held on Monday, April 21.''

The ECB's governing council decided Thursday to conduct supplementary longer-term refinancing operations with a maturity of six months, the bank said in a statement.

In addition, the council decided to conduct further supplementary LTROs with a three-month maturity, it said, adding the regular monthly LTROs remain unaffected.

These measures ''are aimed at supporting the normalization of the functioning of the euro money market,'' the ECB said.

The supplementary three-month and six-month operations will be carried out through a variable rate standard tender procedure with preset amounts.

One supplementary six-month LTRO with a preset amount of 25 billion euros will be allotted on April 2, settled on April 3, and will mature on Oct. 9, the ECB said.

Another supplementary six-month LTRO, in the amount of 25 billion euros, will be allotted on July 9, settled on July 10, and will mature on Jan. 8, 2009.

Two new supplementary three-month LTROs, with preset amounts of 50 billion euros each, will replace the two currently outstanding supplementary three-month LTROs of 60 billion euros each.

The first will be allotted on May 21, settled on May 22, and will mature on Aug. 14. The second will be allotted on June 11, settled on June 12, and will mature on Sept. 11, the ECB said.
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Publication:Japan Weekly Monitor
Date:Mar 31, 2008
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