Fed Starts Dollar-Swap Lines With Nine More Central Banks
Comment of the Day

March 19 2020

Commentary by Eoin Treacy

Fed Starts Dollar-Swap Lines With Nine More Central Banks

This article by Craig Torres for Bloomberg may be of interest to subscribers. Here is a section:


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.

Eoin Treacy's view

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.

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