Fed Auctions Another $30 Billion To Combat Credit Crisis

WASHINGTON D.C. (AP) — The Federal Reserve has auctioned another $30 billion in funds to commercial banks in an effort to combat a severe credit squeeze.

The latest batch of cash brought an interest rate of just over 3 percent, down slightly from the previous auction. It marked the fifth in a series of auctions that so far have pumped $130 billion in money into the nation’s banking system in affort to provide cash-strapped banks with extra reserves.

The Fed’s hope is that the increased resources will keep banks lending and prevent a severe credit squeeze from making the current economic slowdown worse.