The assets of tax-exempt money market funds inched up by $1.34 billion for the week ending Dec. 8, causing total assets to grow slightly to $494.92 billion for the period, according to the Money Fund Report, a service of of Westborough, Mass.

In the previous week, the funds dipped slightly, losing $500.2 million to settle at $493.58 billion for the week ending Dec. 1. The week before that, the funds added $1.61 billion to reach $494.08 billion.

The average seven-day yield for the 516 funds in the report this week dropped to 0.62% from 0.79%, while the average maturity remained unchanged at 30 days.

Taxable funds, meanwhile, also posted gains for the week ending Dec. 9, gaining inflows of $56.13 billion to climb to a new all-time high of $3.21 trillion, after setting a record of $3.16 trillion only last week when the funds accumulated $23.55 billion.

The yields on taxable money funds fell 10 basis points to 0.94% from 1.04%, according to the report.

The combined assets of the 1,764 funds in the report rose by $57.5 billion and also posted a new all-time record of $3.71 trillion in total assets for the week ending Dec. 9.

The previous record was set just last week when the combined assets of all funds totaled $3.67 trillion after the funds received inflows of $23.05 billion for the week ending Dec. 2.

While the yields on tax-free and taxable money funds declined this week, other segments of the short-term market saw yields either increase slightly or stay the same compared with last week.

The variable-rate demand obligation sector, for instance, saw the yields on general market dailies rise to 0.85% as of yesterday up from 0.83% last Thursday, according to Municipal Market Data. The yields on general market weeklies, meanwhile, remained unchanged at 1.38% yesterday compared with last Thursday, according to MMD.

The Securities Industry and Financial Markets Association's weekly swap index dipped to its lowest level of the year when it declined to 0.85% on Dec. 3 from 1.03% on Nov. 26, 1.12% on Nov. 19, and 1.14% on Nov. 12.

The index previously soared to a yearly high of 7.96% back on Sept. 24 during the outset of the financial turmoil stemming from the fallout in the banking industry and the nation's overall economic crisis.

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