The Federal Reserve established temporary dollar liquidity-swap lines with nine additional central banks,
expanding the rapid roll-out of financial-crisis-era programs to combat the economic meltdown from the coronavirus pandemic.
The new facilities total $60 billion for central banks in Australia, Brazil, South Korea, Mexico, Singapore, and Sweden, and $30 billion each for Denmark, Norway, and New Zealand. The swap lines will be in place for at least six months.
The announcement followed the late Wednesday launch of a Fed facility to support money market mutual funds and comes as part of sweeping emergency measures the U.S. central bank has unleashed to support the economy from the coronavirus.
The Fed already has standing swap lines with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.
Boosting the availability of Dollars is a necessary development following the currency’s surge over the last two weeks which is reflective of a massive deleveraging in the nonbank lending community of hedge funds.Click HERE to subscribe to Fuller Treacy Money Back to top