BNY Mellon stepped in to support one of its money market funds amid sharp outflows from parts of the sector this week, buying $1.2bn of the fund’s assets so it had cash to help cover redemptions.
The US bank made the liquidity injection as investors withdrew $6bn from the Dreyfus Cash Management fund in the week ending Thursday, around half of its assets, according to Crane Data.
The fund is a “prime” money market fund that invests in short-term corporate debt, including commercial paper and certificates of deposit. Outflows from these funds have heaped pressure on short-term funding markets as concern about coronavirus has grown, sending borrowing costs higher for companies and US municipalities and prompting a series of interventions from the Federal Reserve.
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