Central banks meet to boost dollar liquidity in the market
In order to enhance the effectiveness of funding in US currency, six monetary agencies that currently offer their operations in dollars have decided to increase the frequency of short-term operations.
Elisabeth Frantz/Reuters
Six central banks – including the Eurozone – have come together to boost dollar liquidity in the market. The announcement came on Sunday, after a weekend in which monetary authorities did their best to calm the markets.
Bank of Canada, Bank of England, Bank of Japan, European Central Bank, Federal Reserve [dos EUA] The Swiss National Bank announced today [domingo] Coordinated action to increase liquidity provision through liquidity swap line agreements,” the ECB prompted in its statement.
To enhance the effectiveness of US currency funding, central banks that currently offer their operations in dollars have decided to increase the frequency of operations with maturities of seven days to one day (currently conducted on a weekly basis).
Daily operations will begin on Monday and will continue at this pace “at least until the end of April,” explains the monetary authority led by Christine Lagarde.
“The network of ‘swap’ lines between these central banks is a set of permanent facilities available and serves as an important liquidity reserve to ease tensions in global financial markets, thus helping mitigate the effects of these tensions on the provision of credit to families and businesses,” he adds.
The European Central Bank and the Federal Reserve had already expressed support at the end of Sunday for another decision by the Swiss National Bank: the sale of Credit Suisse to UBS to stem market turmoil and the risks posed by a reputational crisis at the bank. at the global level.
According to the US central bank led by Jerome Powell, various state governors were in contact over the weekend.
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