(Rewrites, adds detail.)
By Emese Bartha
Of DOW JONES NEWSWIRES
FRANKFURT -(Dow Jones)- The European Central Bank and other leading central banks Thursday said they will extend liquidity-providing operations through January 2010 to further cushion money markets.
The ECB, in agreement with other leading central banks including the U.S. Federal Reserve, decided to continue conducting U.S. dollar liquidity providing operations from October 2009 to January 2010, the ECB said Thursday.
The Bank of England and the Swiss National Bank took similar action and the Bank of Japan also said it will continue dollar liquidity providing operations into January 2010.
Accordingly, the ECB will continue to conduct seven-day dollar repurchase operations against ECB-eligible collateral in the form of a fixed-rate tender with full allotment, the bank said.
However, "given the limited demand and the improved conditions in funding markets," the 84-day U.S. dollar tender will be discontinued after the operation to be held Oct. 6, it said.
The ECB retains the right to restart the 84-day tender "if needed" along with other dollar liquidity-providing operations that have been discontinued.
In agreement with the Swiss National Bank, the ECB will also continue to hold Swiss franc liquidity-providing swap operations until Jan. 31, 2010, "to support further improvements in the short-term Swiss franc funding markets." Separately, the SNB said it, the ECB and the Hungarian and Polish central banks will conduct euro-Swiss franc foreign exchange swaps with a term of seven days through January 2010.
The BOE said in a separate statement that it will "continue to keep its U.S. dollar repo operations under review in the light of market conditions."
Web site: www.ecb.int
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