March 20, 2020 / 3:09 PM / in 11 days

Fed expands money market liquidity facility to municipal market

FILE PHOTO: The Federal Reserve building pictured in Washington, U.S., July 16, 2018. REUTERS/Leah Millis/File Photo

WASHINGTON (Reuters) - The Federal Reserve Board on Friday said it was expanding its program of support to enhance the liquidity and functioning of state and municipal money markets.

Loans will now be available “to eligible financial institutions secured by certain high-quality assets purchased from single state and other tax-exempt municipal money market mutual funds,” through the Money Market Mutual Fund Liquidity Facility the Fed set up on Wednesday, the U.S. central bank said in a statement.

Reporting by Howard Schneider and Lindsay Dunsmuir; Editing by Franklin Paul

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