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US Fed nods $13 bn currency swap facility

Source: PTI
September 26, 2008 15:42 IST
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The US Federal Reserve on Thursday said it has approved an additional $13 billion currency swap facility from the Bank of England, the European Central Bank and the Swiss National Bank, a move aimed at improving liquidity conditions in global financial markets.

The Federal Open Market Committee has authorised a $10 billion increase in its temporary swap facility with the ECB and a $3 billion increase in its facility with the Swiss National Bank, a Fed statement said.

These expanded facilities will now support the provision of US dollar liquidity in amounts of up to $120 billion by the ECB and up to $30 billion by the Swiss National Bank.

These operations are designed to address funding pressures over quarter-end, while the Central banks continue to work together closely and are prepared to take further steps as needed to address the ongoing pressures in funding markets, the statement added.

In sum, these changes represent a $13 billion addition to the $277 billion previously authorised temporary reciprocal currency arrangements with other central banks.

In addition to the swap lines with ECB and the Swiss National Bank, temporary swap lines previously have been authorised with: the Bank of Japan ($60 billion), the Bank of England ($40 billion), the Reserve Bank of Australia ($10 billion), the Bank of Canada ($10 billion), the Bank of Sweden ($10 billion), the National Bank of Denmark ($5 billion) and the Bank of Norway ($5 billion).

These arrangements will remain till January 30 next year, it added.

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