The New York Federal Reserve Bank said Friday it will extend its overnight cash injections for the money market into next year in order to keep short-term interest rates stable.

The New York Fed, which oversees market operations for the Federal Reserve system, said on its website it will conduct overnight operations "at least through January" to ensure banks have enough cash in reserve.

Since September, the central bank has scrambled to prevent a liquidity shortage from causing short-term interest rates to spike beyond its control.

Until at least December 12, the New York Fed will conduct overnight "repo" operations of at least $120 billion.

Over that period, it will also conduct term repo operations over longer periods, swapping Treasurys and mortgage-backed securities three times a week for aggregate amounts of between $15 billion and $35 billion three times a week.

To ensure their cash held in reserve does not fall below required levels, banks lend each other cash for short periods, typically overnight.