Washington - The US Federal Reserve Wednesday extended until January 2009 its emergency lending programmes to investment banks suffering from an ongoing credit crisis.

The announcement lengthens direct lending options that are usually reserved only for commercial banks, but were first made available to financial firms at the start of 2008 in an effort to prevent a more serious collapse of investment banks and mortgage lenders in the United States.

The Fed also said it had increased its dollar swap line with the European Central Bank by 5 billion dollars to 55 billion dollars in an effort to boost the weak dollar.

The US central bank said its emergency measures would end only when it was determined that "conditions in financial markets are no longer unusual and exigent."

Financial institutions have reported nearly 500 billion dollars in writedowns of mortgage-related assets over the past year, forcing many to raise extra capital. The Fed since January has accepted mortgage-backed securities as collateral for its loans in an effort to quell the market turmoil. (dpa)