A Federal Reserve report on Thursday said those firms averaged US$18.6 billion (S$25.3 billion) in daily borrowing over the past week. That compared with US$22.6 billion in the previous week.

It marked the fourth straight week where investment firms borrowed less from the central bank.

The programme, which began on March 17, is one of several extraordinary actions the Fed has taken recently to limit the damage from a trio of crises - housing, credit and financial.

After the sudden crash of Bear Stearns, the fifth-largest US investment bank, fears grew that others might be in jeopardy, given major stresses in credit and financial markets.

Scrambling to avert a market meltdown, Fed Chairman Ben Bernanke and his colleagues - in the broadest use of the central bank's lending authority since the 1930s - agreed last month to temporarily let investment firms obtain emergency financing from the Fed, a privilege previously granted only to commercial banks.

The programme, similar to the one the Fed has long had for commercial banks, will continue for at least six months. It gives investment firms a place to go for overnight loans. Commercial banks and investment companies now pay 2.25 per cent in interest for the loans. The Fed lowered that rate by a quarter-percentage point on Wednesday.

Banks, however, continued to step up their borrowing. Banks averaged US$11.6 billion in daily borrowing for the week ending April 30. That compares with US$10.7 billion for the previous week. The identities of commercial banks and investment houses are not released.

As part of the effort to relieve credit strains, the Fed auctioned US$24.12 billion in super-safe Treasury securities to investment firms on Thursday.

The auction - the sixth of its kind - fetched bids totaling slightly less than the US$25 billion worth of securities the Fed was making available.

In exchange for the 28-day loan of Treasury securities, bidding firms can put up more risky investments as collateral, including certain shunned mortgage-backed securities.

The auction programme is intended to help financial institutions and the troubled mortgage market.

The goal is to make investment houses more inclined to lend to each other. It also is aimed at providing relief to the distressed market for mortgage-linked securities. Questions about their value and dumping of these securities had driven up mortgage rates, aggravating the housing slump. -- AP