September 25, 2019 / 10:36 PM / 20 days ago

UPDATE 1-U.S. money fund assets hit near decade-high -iMoneyNet

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NEW YORK, Sept 25 (Reuters) - U.S. money market fund assets rose to a near decade-high as investors and companies replenished cash after pulling out money the week before for corporate taxes and to settle bonds they bought, a private report released on Wednesday said.

Assets of money funds, which are seen as being nearly as safe as bank accounts, increased $53.00 billion to $3.388 trillion in the week ended Sept. 24, the Money Fund Report said.

It was the largest sum since the $3.402 trillion in the week of Oct. 6, 2009, according to the report, published by iMoneyNet.

Analysts partly blamed last week’s money market turmoil on outflows from banks and money funds for tax and bond payments. They resulted in some borrowing costs spiking as high as 10%.

Since last Tuesday, the Federal Reserve has sought to stabilize lending conditions by injecting billions in temporary cash into the banking system daily.

Taxable money fund assets grew by $53.71 billion to $3.254 trillion, while tax-free assets fell $713.40 million to $133.26 billion, iMoneyNet said.

The iMoneyNet average seven-day simple yield for taxable money funds fell to 1.69%, a one-year low, from the previous week’s 1.88%. The weighted average maturity among taxable funds was unchanged at 34 days.

The iMoneyNet average seven-day yield for tax-free and municipal funds rose to 1.02%, the highest since July, from 0.92%. The weighted average maturity of tax-free funds was steady at 35 days.

Reporting by Richard Leong Editing by Tom Brown

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