MONEY MARKETS-Interbank dollar rates edge up on year-end anxiety

* Dollar interbank rates stay high on year-end anxiety

* Fed and ECB still providing crucial liquidity

* Focus on central bank rate cuts (Updates to New York close)

By Emelia Sithole-Matarise and Chris Reese

LONDON/NEW YORK, Nov 28 (Reuters) - Interbank dollar funding rates edged up on Friday, revealing anxiety about cash supplies as banks prepare to close their books for the year-end even as many of them used government guarantees to issue debt.

U.S. banks' direct borrowing from the Federal Reserve at the discount window fell in the latest week, but the Federal Reserve's presence in commercial paper market rose, Fed data showed on Friday.

Banks' overall borrowings from the Fed averaged $283.18 billion per day in the week ended Nov. 26, versus an average $296.82 billion per day the week before.

Banks' primary credit discount window borrowings averaged $93.63 billion per day in the latest week, versus $91.55 billion the previous week.

Primary dealer and other broker dealer borrowings were $57.89 billion as of Nov. 26, versus $46.61 billion on Nov. 19.

Credit extended to American International Group, Inc., a new category in this week's Fed release, averaged $79.59 billion per day in the week ended Nov. 26.

The Fed's lending to banks to enable them to purchase asset-backed commercial paper from money market mutual funds was $53.31 billion as of Nov. 26, versus $61.92 billion on Nov. 19.

Proceeds from the U.S. Treasury's sales of Treasury bills in the Fed's supplementary financing account, which are helping to fund the Fed's support of financial institutions, were $479.05 billion as of Nov. 26, versus $508.96 billion as of Nov. 19.

The Fed's balance sheet liabilities were $2.091 trillion on Nov. 26 versus $2.171 trillion on Nov. 19.

The Federal Reserve continued to increase its role in the U.S. commercial paper (CP) market with net portfolio holdings of the Fed's Commercial Paper Funding Facility rising to $294.09 billion as of Nov. 26 versus $270.88 billion on Nov. 19, data on Friday showed.

Total U.S. commercial paper outstanding rose to $1.640 trillion in the week ended Nov. 26, up $26.2 billion from a week earlier.

The asset-backed commercial paper segment, which had helped to fuel the erstwhile housing boom that has turned to bust, expanded by $5.8 billion to a total of $746.8 billion in the latest week.