Central banks in Japan and Australia added $15.7 billion to the financial system to hold down borrowing costs, slowing the pace of cash injections as a U.S. plan to buy banks' bad debts eased credit-market jitters.
The Bank of Japan added ¥1.5 trillion ($14.1 billion) to the financial system in its fifth day of fund injections. The Reserve Bank of Australia added 2.025 billion Australian dollars ($1.6 billion) about a fifth lower than the daily average for last week.
The U.S. Federal Reserve led central banks in Europe and Asia in pouring cash into global financial markets over the past week as the collapse of Lehman Brothers Holdings Inc. sparked a crisis of confidence.
Stocks rallied and money-market rates dropped after the U.S. government announced a $700 billion plan to avert a financial meltdown by buying troubled assets.
"Though funding pressures are still there, some of the tightness in cash markets has eased," said Sally Auld, interest rate strategist at JP Morgan Securities Australia Ltd. in Sydney.
Japan's overnight call loan rate was at 0.25 percent after the BOJ's operation at 9:20 a.m. Monday in Tokyo, falling from as high as 0.45 percent, according to Tokyo Tanshi Co.
The BOJ pumped ¥11 trillion into the money markets last week, its biggest injection in at least six years as central banks around the world worked together to prevent a financial meltdown.
"There may have been a need for today's operation because foreign banks' repo and operation rates are high," said Shinsuke Kanabu, a project and research director at Central Tanshi Co. "If you look only at the Japanese interbank rates, there's no need for the BOJ injections."
Non-Japanese banks are facing the highest premiums to borrow yen overnight since UBS AG, the European bank hardest hit by the subprime crisis, reported a record loss Feb. 14.