The New York Federal Reserve Bank announced Monday it will increase its daily injections of cash into financial markets by $50 billion to $150 billion as a protective step amid the coronavirus epidemic.

The increase "should help support smooth functioning of funding markets as market participants implement business resiliency plans in response to the coronavirus," the New York Fed said in a statement.

The Fed uses the money market to keep the central bank's policy interest rate - the federal funds rate - in line with the desired range. The Fed made an emergency rate cut last week of a half point, lowering the range to 1.0-1.25 percent to boost confidence in the face of increasing concerns the spread of COVID-19 could impact the US and global economies. The move increases daily repurchase agreements or repos, and in addition, the bank will more than double the two-week repos to $45 billion.

The New York Fed said "these adjustments are intended to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures that could adversely affect policy implementation."

Financial institutions use money markets to borrow for very short periods, from one day to a year, a crucial function to keep the gears of the economy running.

In so-called repurchase or "repo" agreements, banks borrow by putting up assets like Treasury notes as collateral and then repay the loans with interest the following day.

This lets them replenish the cash holdings they keep at the central bank whenever the amount falls below the required minimum set by the Fed. The New York Fed last September had to step in to add liquidity to the markets when overnight interest rates began rising due to an apparent concern over lack of liquidity.