FRB and Central Banks Establish U.S. Dollar Liquidity Swap Arrangements

The Federal Reserve Board ("FRB") established temporary U.S. dollar liquidity arrangements (a/k/a "swap lines") with several other central banks to "help lessen strains in global U.S. dollar funding markets."

The FRB - in coordination with the Reserve Bank of Australia, the Banco Central do Brasil, the Danmarks Nationalbank (Denmark), the Bank of Korea, the Banco de Mexico, the Norges Bank (Norway), the Reserve Bank of New Zealand, the Monetary Authority of Singapore and the Sveriges Riksbank (Sweden) - agreed to support U.S. liquidity in amounts ranging from $30 billion to $60 billion from each bank, respectively. The FRB noted that the swap lines will be in place for a period of six months.

The FRB recently announced a similar action - in coordination with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank - to enhance the liquidity swap line arrangements for the standing U.S. dollar, which went into effect March 16, 2020 (see previous coverage).