Central banks get together to increase flow of US dollars
A group of central banks has announced a joint measure to boost the amount of US dollars in the global financial system, in an effort to help stem the crisis that has hit the banking sector in recent days.
“The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements,” the Federal Reserve said in a statement on Sunday.
According to the Fed, US dollar swap lines “are designed to improve liquidity conditions in dollar funding markets in the United States and abroad by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions during times of market stress.”
US dollars will be made available daily, rather than the usual frequency of every seven days, Sunday’s statement said.