European central banks continue dollar cash loans

The Bank of England and the Swiss National Bank continued their daily offers of overnight dollar loans on Tuesday, but reported that demand for the cash had tapered off, more evidence that short-term credit markets were loosening up.

The Swiss National Bank offered its standard $10 billion but got bids for just $600 million from four bidders.

The Bank of England offered its typical $10 billion to its limit of 10 bidders and received bids for just $400 million.

The European Central Bank did not make an overnight offer and has said it would only do so if it felt market conditions warranted it.

The loans are made to provide short-term liquidity to banks that require dollars to make their businesses function on a daily basis. The lower demand suggests strains on short-term credit markets are waning.

The BoE and ECB are due to announce interest rate decisions on Thursday, with both expected to cut their benchmark rates by at least half a percentage point.

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On the Net:

http://www.ecb.int

http://www.bankofengland.co.uk

http://www.snb.ch