Thursday, March 29, 2012

Reuters: US Dollar Report: Swaps with foreign cenbanks total $1.802 bln-NY Fed

Reuters: US Dollar Report
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Swaps with foreign cenbanks total $1.802 bln-NY Fed
Mar 29th 2012, 20:27

NEW YORK, March 29 | Thu Mar 29, 2012 4:27pm EDT

NEW YORK, March 29 (Reuters) - The Federal Reserve provided $1.802 billion in liquidity to foreign central banks this week, the New York Fed said on Thursday.

The European Central Bank was the sole institution to tap the swap lines this week, swapping the full $1.802 billion. The terms for the ECB swap were seven days at 0.65 percent, the New York Fed also said.

The Federal Reserve has established swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of Japan.

The swap facilities respond to the re-emergence of strains in short term funding markets in Europe. They are designed to improve liquidity conditions in global money markets and to minimize the risk that strains abroad could spread to U.S. markets, by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions, according to the Fed.

The swap lines with the ECB, BOE, SNB and BOJ will provide these central banks with the capacity to conduct tenders of U.S. dollars in their local markets at fixed local rates for full allotment.

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