LONDON, March 17: The Bank of England said on Monday it had pumped 5.0 billion pounds ($10bn) into short-term money markets to combat the ongoing global squeeze on credit.

The BoE said in a statement that it offered the funds at its key lending rate of 5.25 per cent in a three-day offer. Borrowers will have to repay the funds on Thursday.

The auction was almost five times oversubscribed with received bids totalling 23.6 billion pounds, it added.“This action is being taken in response to conditions in the short-term money markets this morning,” the BoE statement said.

The British central bank is seeking to address long-term liquidity issues in the so-called interbank market where commercial banks lend to each other.

“The Bank will take actions to ensure that the overnight interbank rate is close to Bank Rate,” it added.

“Along with other central banks the Bank of England is closely monitoring market conditions.”—AFP