WASHINGTON The Federal Reserve announced Friday that it will auction another $60 billion in March as it continues to combat the effects of a severe credit crisis. It repeated a pledge to keep holding the auctions "for as long as necessary."
The central bank said it will make $30 billion available to cash-strapped banks at each of two auctions, on March 10 and 24.
The Fed began the new auctions in December in hopes that the increased supply of cash would prompt banks to keep lending and prevent a severe credit squeeze from making the current economic slowdown even worse.
Federal Reserve Chairman Ben Bernanke told members of Congress this week that the Fed has been pleased with the results of the new procedure.
In its announcement Friday, the central bank said that it intended to keep holding the auctions every two weeks "for as long as necessary to address elevated pressures" in the credit markets.
It said decisions regarding auctions in April would be announced by March 28.
The central bank has held six auctions so far, two each in December, January and February, providing $160 billion in extra reserves through short-term loans to cash-strapped banks.
The new process was adopted after the Fed had only limited success in encouraging banks to use its "discount window," where the Fed makes direct loans to commercial banks, after the credit crisis hit financial markets last August.