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The Federal Reserve on Wednesday decided to introduce a new lending facility to support the smooth flow of credit to households and businesses as the spread of coronavirus weighed heavily on the financial markets.
The board launched a Money Market Mutual Fund Liquidity Facility, or MMLF. This fund will provide loans to financial institutions to purchase assets from money market mutual funds.
The treasury will provide $10 billion for the program.
Money market funds are common investment tools for families, businesses, and a range of companies, the bank said in a statement.
"The MMLF will assist money market funds in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy," the Fed added.
The Fed's announcement came after the European Central Bank announced a new EUR 750 billion emergency bond purchase programme.
Elsewhere, Reserve Bank of Australia decided to lower its key interest rates further to a record low and purchase government bonds.
