2020.03.2004:38:00UTC+00Fed To Establish Temporary Dollar Liquidity Arrangements With Other CBs

The Federal Reserve will establish a temporary swap lines with other nine central banks as part of coordinated action to improve liquidity in the financial markets.

In a joint statement, the Fed said it will extend U.S. dollar liquidity arrangements with the Reserve Bank of Australia, the Banco Central do Brasil, the Danmarks Nationalbank, the Bank of Korea, the Banco de Mexico, the Norges Bank, the Reserve Bank of New Zealand, the Monetary Authority of Singapore, and the Sveriges Riksbank. The Fed has standing US dollar swap lines with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.

The swap facility will be in place for at least six months. The swap lines will help to ensure stable liquidity conditions in the USD funding markets.

These new facilities will support the provision of U.S. dollar liquidity in amounts up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank.

The swap lines with the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank of New Zealand will amount up to $30 billion.

The Fed said these facilities are designed to help lessen strains in global U.S. dollar funding markets, thereby mitigating the effects of these strains on the supply of credit to households and businesses, both domestically and abroad.