The US Federal Reserve said another auction of $20 billion in credit it conducted on Thursday 20 December as part of a coordinated trans-Atlantic effort to thaw the frozen credit markets, found fewer bidders than in its first auction earlier in the week.

Thursday's sale was at an interest rate of 4.67 percent, up from 4.65 percent during the first sale. But it drew only 73 bidders compared with the 93 who bid at the first auction.

The banks seem to be sending a message that they are not that desperate for money, and Fed hawks may well begin to ask whether there is any real problem at all. But, says the Fed, it plans to continue the biweekly auctions from its newly created Term Auction Facility ''for as long as necessary''.

The auction was part of a coordinated move by central banks across the Atlantic to make money available in credit markets and encourage banks to keep lending.

Most interbank lending rates for the euro, dollar and pound fell on Friday, extending a decline that began after the European and US central banks announced on 12 December that they intended to take new measures to inject liquidity to ease money market tensions.

The European Central Bank (ECB) auctioned $10 billion in 35-day funds to euro-zone banks on Friday and met solid demand for its second tender of US dollars, which was made possible by a currency swap with the Fed.

Some 27 banks bid for a total of $14.115 billion and the ECB allotted the full $10 billion it had planned after being lent dollars by the US Federal Reserve. The US central bank said it will announce on 4 January the sizes of the auctions that will be held on 14 and 28 January.

It announced a series of four auctions on 12 December in concert with announcements about other credit-easing steps by the ECB and the central banks of Britain, Canada and Switzerland.

The Fed said $57.664 billion of bids were submitted for the latest $20 billion that it sold, meaning that the bid-to-cover ratio was 2.88, down from 3.08 at its initial auction. Notwithstanding the reduction in participating banks, analysts felt the central bank was making slow but steady progress to bring down rates by injecting liquidity.