Canada's central bank to inject billions into money markets

TORONTO (AP) -- Canada's central bank is increasing its plans to inject extra cash into term lending markets from $8 billion Canadian dollars ($7.4 billion) to C$20 billion ($18.5 billion) to ensure Canadians have access to loans.

The Bank of Canada's announcement Friday signals that the global financial crisis is seriously affecting the availability of credit in Canada.

The bank also said its expanding short-term purchase and resale agreements under which commercial lenders get access to funds for up to 91 days.

The bank now expects the minimum total outstanding will hit C$20 billion ($18.5 billion) by Nov. 6, and it intends to hold weekly auctions at least until the end of the year.

Market conditions have also prompted the bank to accept asset-backed commercial paper as collateral from primary dealers on a temporary basis.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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