Oslo (Reuters) - Norway's money market remained tight on Wednesday, dealers said, even as the central bank offered to inject more cash to help ease one of the country's worst liquidity crunches in years.

The market effectively froze on Tuesday, and Norges Bank injected $5 billion in fx swaps as well as 70 billion Norwegian crowns ($12.07 billion) in crown-denominated "F-loans", its usual liquidity instrument.

Since Friday, the central bank has injected a whopping $29 billion in cash into the market -- the equivalent of 7 percent of Norway's gross domestic product.

On Wednesday, it offered to sell more F-loans in an auction, with the amount it injects depending on market demand.

"Due to the dollar crisis, there are still huge problems, and they will continue," said Jon Thoresen, head of Norwegian crown trading at Danske Bank in London.

Norway's money market rates are largely based on dollar swaps and the turmoil which hit global markets in the wake of the Lehman collapse this weekend has made it difficult for Norwegian banks to gain access to dollars this week.

Market-maker banks stopped functioning on Tuesday and suspended the daily market fixing for the first time since the Sept. 11 attacks on New York and Washington.

"We're trying to open with wider spreads," Olav Gunnes, head of Norwegian interest rate trading at the country's biggest bank DnB NOR, which is one of the market makers.

The cost of borrowing overnight dollars on the interbank market surged above 10 percent on Tuesday, indicating that money markets had frozen and counterparty trust broken down completely.

The thirst for the U.S. currency helped weaken the crown this week too.