ECB re-enters money markets as fears of volatility return
The European Central Bank (ECB) will push extra liquidity into the money market to counter "re-emerging risk of volatility", it announced on Friday.
The bank said it had "noted re-emerging tensions in the euro money market", and would introduce more liquidity in its next refinancing, and in all subsequent refinancings until the end of the year. The object was "to limit the volatility of very short term rates", it added.
No details of the amounts involved were released. The next ECB refinancing operation is scheduled for November 28.
Although short-term borrowing rates have been flat or declining since mid-October, last week saw the benchmark Euribor (European interbank offering rate) start to rise again. It ended Friday at 4.7%, its highest since the credit crisis earlier this year.
See also: Bank of England and ECB act to boost markets
Central banks up liquidity
Central banks act again as credit crisis continues
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