(Bloomberg) -- The Federal Reserve Bank of New York’s operation to inject cash into the financing system over the end of the year was undersubscribed on Thursday, a possible indication that dealer balance sheets are nearing capacity.

Primary dealers submitted $18 billion in bids for the Fed’s 14-day term repo operation, which matures Jan. 9. That was less than the $35 billion on offer. This is the third term operation aimed at year-end funding that has come in under the maximum amount.

Thursday’s result could mean either that dealer balance sheets are approaching capacity, or that those who need funding for year-end have secured enough. It doesn’t guarantee that pressures are gone, though. As of Tuesday, the overnight repo rate for the end of the year was trading between 3.50% and 3.35%, according to Citigroup.

The Fed has been injecting liquidity into the repo market since the Sept. 17 when the overnight rate for general collateral repurchase agreements spiked to 10% from around 2%. It has also been buying Treasury bills to add reserves to the system.

The Fed also conducted an overnight operation Thursday with a limit of $120 billion. As with the most recent of these actions, it was undersubscribed, attracting just $28.8 billion of bids.

(Adds results of overnight repo operation in last paragraph.)

To contact the reporter on this story: Alexandra Harris in New York at aharris48@bloomberg.net

To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Debarati Roy

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