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Fed Starts Dollar-Swap Lines With Nine More Central Banks (1)
LONDON (Capital Markets in Africa): 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 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.
The expansion of the dollar swap lines allows foreign central banks to give their companies and banks access to foreign currency to buffer against dollar lenders retreating from risk.
The Fed had swap lines outstanding to 14 central banks in the financial crisis.