Dollar crunch eases as central banks step up swaps action
Core swap recipients will offer daily dollar auctions; cross-currency basis narrows
There were signs today (March 20) that pressures in dollar-funding markets are easing, after a flurry of co-ordinated actions by central banks to supply liquidity through swap lines from the US Federal Reserve.
The Bank of Canada, the Bank of England, the European Central Bank, the Bank of Japan and the Swiss National Bank today agreed to begin daily dollar repo operations from March 23. The facilities are backed by potentially unlimited swap lines provided by the Fed.
The daily operations
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