SYDNEY, Sep 19 (Reuters) Australia's central bank added only a minor amount of cash to the banking system on Tuesday as an aggressive cut in U.S. interest rates helped ease pressure in the global interbank market.
In its regular daily money market operation, the Reserve Bank of Australia (RBA) added just A$495 million ($423 million) in cash, well below Tuesday's A$1.29 billion.
It was also less than the market's estimated need of A$924 million, implying that commercial banks' cash balances with the central bank would dip from a relatively large A$4.55 billion.
RBA Governor Glenn Stevens on Tuesday noted the need for cash seemed to have lessened in the last few days and new credit was beginning to flow again.
And the logjam in lending looked to have eased further after the Federal Reserve delivered a hefty 50 basis-point cut in its funds rate to 4.75 percent.
On Wednesday, Australian dollar three-month bank bill rates <0AUBILLS=> had fallen to 6.85/87 percent, down from 6.95 percent on Tuesday and highs around 7.12 percent last week.
The RBA has been generous with its liquidity since early August as a near seizure in some markets, particularly for commercial paper, pushed interbank rates sharply higher.
The central bank has also widened the types of securities it will accept as collateral when lending to banks, the first stage of which began on Monday.
REUTERS RC BST0634