The central bank said it was making the moves 'to address heightened liquidity pressures in term funding markets'.

'The Federal Reserve is in close consultation with foreign central bank counterparts concerning liquidity conditions in markets.'

The Fed said it was raising the amounts available in its Term Auction Facility program this month to a combined 100 billion dollars (S$140 billion).

The TAF was launched in December and designed to relieve elevated pressure in the short-term, inter-bank funding market.

The auctions on March 10 and March 24 each will be increased to 50 billion dollars, an increase of 20 billion dollars from the amounts that were announced for the auctions on February 29.

'The Federal Reserve will increase these auction sizes further if conditions warrant,' it said in a statement.

'To provide increased certainty to market participants, the Federal Reserve will continue to conduct TAF auctions for at least the next six months unless evolving market conditions clearly indicate that such auctions are no longer necessary.'

The Fed also said it was launching Friday a series of term repurchase transactions that are expected to reach 100 billion dollars.

The repo transactions will be conducted as 28-day term repurchase agreements in which primary dealers may elect to deliver as collateral any of the types of securities - Treasury, agency debt, or agency mortgage-backed securities - that are eligible as collateral in conventional open market operations.

The sizes of these operations would be increased 'if conditions warrant,' the central bank said. -- AFP