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ECB to Auction $15 Billion to Ease Credit Tensions

The European Central Bank plans to auction up to $15 billion in extra 28-day dollar refinancing to euro zone banks to ease tensions on interbank lending markets, the ECB said on Tuesday.

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"Today the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve and the Swiss National Bank are announcing specific measures," the ECB said in a statement.

"It is intended to continue the provision of (U.S. dollar) liquidity for as long as the (ECB's) Governing Council considers it to be needed in view of the prevailing market conditions," the ECB added.

Bids for the funds, which follow the same procedure as that for funds auctioned in December and January, are due by March 25 and the funds settle on March 27.

On Friday the ECB said that it had no plans to auction further U.S. dollar funds because the market problems that made the highly unusual step necessary late last year were no longer there.

Since then some traders have said the absence of U.S. dollar funding from the ECB -- which euro zone banks can receive against collateral denominated in euros -- has contributed to a rise in money market tensions.