The Federal Reserve said Monday it would pay a higher interest rate on excess bank reserves than previously planned.

The central bank changed the interest rate paid on excess reserves from 0.75% less than the target federal funds rate to 0.35% less than the target federal funds rate. The Fed hopes the move will help “foster trading in the funds market at rates closer to the target rate," according to a release.

Overall, the move helps the Fed inject liquidity and support the markets without causing major fluctuation in overnight lending rates.

In a separate release, the New York branch of the Federal Reserve issued a clarification and vindication of its new Money Market Investor Funding Facility. The facility was created to purchase commercial paper from money market funds that have been beleaguered by the recent financial turbulence.

“The short-term debt markets have been under considerable strain in recent weeks as money market mutual funds and other investors have been increasing their liquidity positions by investing in shorter-term—frequently overnight—assets,” the release said.

“By facilitating sales of money market instruments in the secondary market, the [facility] should give money market mutual funds and other money market investors confidence that they can extend the terms of their investments and still maintain appropriate liquidity positions.”

Also of interest, the release said the Fed could purchase up to $600 billion in eligible assets from money market funds. Since the Fed will be financing 90% of the operation, its total lending could reach as high as $540 billion, according to the release. The Fed hopes to minimize its risk by only purchasing “short-term, high-credit-quality debt instruments,” the release said.