The total of bids received from banks at the latest auction was $58.4-billion for the $30-billion that was being provided in short-term 28-day loans.

The Federal Reserve, seeking to combat the effects of a serious credit crisis, said Tuesday it had auctioned $30-billion (U.S.) in funds to commercial banks at an interest rate of 3.010 per cent.

It marked the fifth in a series of auctions that so far have pumped $130-billion in money into the U.S. banking system in an effort 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.

The latest auction results showed that the Fed’s effort is having success. The 3.010 per cent interest rate is the lowest rate for any of the five auctions held so far. It was slightly below the previous auction, when the interest rate had been 3.123 per cent.

The first two auctions in December had seen rates for the funds provided at 4.65% and 4.67% while the first auction in January had seen a rate of 3.95%.

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