The U.S. Federal Reserve, working to combat the effects of a severe credit crunch, announced Friday it had auctioned another $US20 billion in funds to commercial banks at an interest rate of 4.67%.

The central bank said it had received bids for US$57.7 billion worth of loans, nearly three times the amount being offered, indicating continued strong interest in the Fed’s new approach to providing money to cash-strapped banks.

It was the second of four planned auctions. The first auction, on Monday, of $20 billion resulted in loans being awarded at an interest rate of 4.65%. Two more auctions will occur in early January.

There were 93 bidders seeking $63.6 billion at the first auction and 73 at the second.