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Federal Reserve Increases Operating Hours of US Dollar Swap Lines

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Federal Reserve Increases Operating Hours of US Dollar Swap Lines

According to reports, the Federal Reserve said that in order to improve the effectiveness of providing US dollar funds through the US dollar swap line, the central bank that currently provides US dollar operations has agreed to increase the frequency of 7-day maturity operations from weekly to daily. The increase in operating hours will begin on Monday and will continue at least until the end of April.

Federal Reserve: Global Central Banks Will Increase Liquidity Through Dollar Swap Agreements

Analysis based on this information:


The Federal Reserve has made a move to improve the effectiveness of US dollar funds by increasing the frequency of 7-day maturity operations from weekly to daily. The central bank responsible for providing US dollar operations has agreed to these changes, which will begin on Monday and continue at least until the end of April. This decision shows a concerted effort on the part of the Federal Reserve to make ample funds available in the financial system, particularly at a time where markets are disrupted due to the global coronavirus outbreak.

The US dollar swap lines are used by the Federal Reserve to provide liquidity support to other countries’ central banks. These central banks can use these funds to cover short-term USD funding needs, particularly during times of market disruption. The current swap lines the Federal Reserve has in place are with five other central banks: the Bank of Japan, the European Central Bank, the Bank of England, the Swiss National Bank, and the Bank of Canada. These five institutions can access USD liquidity from the Federal Reserve, and in turn, offer their currencies to US banks to ease USD borrowing amid crises.

By increasing the frequency of these swaps from weekly to daily, the Federal Reserve is ensuring that US dollar funds are available to other central banks when needed. The coronavirus pandemic is causing global financial markets to fluctuate, and these increased swap lines can help stabilize the financial system during times of volatility. The daily operations will continue until at least the end of April, which may signal that the Federal Reserve is anticipating a more prolonged period of market disruption.

In conclusion, the Federal Reserve’s decision to increase operating hours of US dollar swap lines is a proactive and strategic move to maintain stability and liquidity in the financial system. The shift in operations from weekly to daily could provide much-needed reassurance to other central banks amidst the pandemic. This move further highlights the important role the Federal Reserve plays in stabilizing the global financial system during times of market turbulence.

Overall, the three keywords that best summarize this action by the Federal Reserve are “liquidity”, “market disruption”, and “financial stability”.

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