WASHINGTON (Reuters) – The U.S. Treasury Department said on Tuesday it has approved a new Federal Reserve commercial paper funding facility to help American businesses manage their short-term liquidity through the economic slowdown caused by the coronavirus outbreak.

U.S. Treasury Secretary Steven Mnuchin said in a statement that $10 billion of capital from Treasury’s Exchange Stabilization Fund was being invested in the new backstop facility. A similar facility to buy short-term corporate debt was activated during the global financial crisis in 2008.

The new facility, administered by the Federal Reserve Bank of New York, will purchase commercial paper that is highly rated by nationally recognized rating organizations, Mnuchin said. It will charge rates and fees to eligible issuers based on collateral arrangements and other acceptable guarantees.

The commercial paper market is a key source of short-term funding for a range of businesses, but liquidity has dried up in recent weeks.

The announcement by the Treasury and Fed caused stocks to reverse early losses and trade higher, with the S&P 500 index .SPX up about 2.5% after plunging 12% on Monday in its biggest percentage drop since the 1987 “Black Monday” rout.

“The economic disruption and uncertainty created by COVID-19 has created challenges for the commercial paper market, constraining access to short-term credit for American businesses,” Mnuchin said, referring to the respiratory illness causes by the coronavirus. The facility will “help American businesses manage their finances through this challenging period.”

The seldom-used Exchange Stabilization Fund, which had total assets of $93.7 billion at the end of February, was created during the Great Depression of the 1930s and has mainly been tapped in crisis situations.

It was last used in 2011 during a coordinated intervention by Group of Seven central banks to tamp down a sharp spike in the Japanese yen after an earthquake and tsunami damaged a nuclear power plant on Japan’s coast.

The Treasury pledged $50 billion in assets from the fund in 2008 to insure U.S. money market mutual funds at the depth of that year’s financial crisis, although no payouts were made.

Prior to that, the Treasury used the fund following the 1994 Mexican economic crisis to help stabilize the Mexican peso.

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