ECB pumps ?30bn into money markets

The bank has pumped cash into nervous money markets because of the volatility and concern over the bankruptcy of Lehman Brothers.

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The European Central Bank has pumped ?30 billion (Dh156.6bn) into nervous money markets because of the volatility and concern over the bankruptcy of Lehman Brothers. The bank announced it offered a quick one-day tender this morning with a minimum bid rate of 4.25 per cent. The bank received 51 bids for ?90.3bn, a clear sign that demand for cash is over the top. The ECB had to be vigilant amid the current turmoil on financial markets, Jean-Claude Trichet, the president of the bank said today. "We have to be extraordinarily alert, we have to be permanently alert. It is an ongoing correction, with episodes of high levels of volatility," Mr Trichet told reporters. Similarly, the Bank of England said it offered up £5 billion (Dh32.9bn) in a three-day auction while the Zurich-based Swiss National Bank said it was also providing liquidity in "a generous and flexible manner" at an overnight rate of 1.9 per cent, but would not say how much was on offer.

* AP