Amid increased demand and liquidity in the short-term market, inflows kept tax-exempt money market funds in positive territory for a third week in a row, gaining $7 billion in new cash for the week ending Oct. 20, according to the Money Fund Report, a service of iMoneyNet.com.

The 533 tax-exempt and municipal funds in the report ended the week with total assets of $497.86 billion, compared with last week when the same amount of funds gained $6.12 billion, bringing total assets to $490.86 billion, according to the report. The average, seven-day yield for the funds dropped to 2.54% from 3.36% last week, which was down from a recent high of 5.02% for the week ending Sept. 29. The average maturity declined to 30 days from 32.

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