The Bank of England HAS injected £4.4 billion (€6.4 billion) into the financial system amid ongoing turmoil in credit markets.
The BoE today lifted the funds available for banks to borrow to about £23.1 billion, in a bid to bring down short-term borrowing costs - or overnight lending rates between commercial institutions.
Last week, the BoE had pumped £1.1 billion into money markets in its first intervention since global credit woes emerged in early August.
The Bank of England had been curiously quiet since the credit crunch erupted last month, prompted by a wave of foreclosures in the high-risk US housing market that threatened mortgage-backed securities elsewhere.
The BoE stance contrasted with vigorous responses by the US Federal Reserve, the European Central Bank and the Bank of Japan - which have pumped tens of billions of dollars into the banking system to tackle the credit squeeze.
The British central bank said in a statement that 'secured overnight rates have fallen, but have remained higher than normal, relative to the bank rate.'
The BoE had last week frozen its key interest rate at 5.75%, and said it was 'too soon' to judge the economic fall-out of the ongoing worldwide credit squeeze.
