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Fed expands money market liquidity facility to muni market

FILE PHOTO: Federal Reserve building pictured in Washington

WASHINGTON (Reuters) - The Federal Reserve Board on Friday said it was expanding its programme of support to enhance the liquidity and functioning of state and municipal money markets.

Loans will now be available "to eligible financial institutions secured by certain high-quality assets purchased from single state and other tax-exempt municipal money market mutual funds," through the Money Market Mutual Fund Liquidity Facility the Fed set up on Wednesday, the U.S. central bank said in a statement.

(Reporting by Howard Schneider and Lindsay Dunsmuir; Editing by Franklin Paul)