Central banks line swap expires
(29 January 2010 – Australia) The Reserve Bank of Australia has announced, in coordination with the world’s other central banks, the expiration of its temporary liquidity swap line with the Federal Reserve, effective 1st February 2010.
In December 2007, the Federal Open Market Committee (FOMC) authorised a reciprocal currency arrangement (liquidity swap line) with the European Central Bank and the Swiss Central Bank to help provide liquidity in US dollars to overseas markets.
In April 2009, the FOMC subsequently authorised further liquidity swap lines with additional central banks including the RBA.
The swap lines were designed to improve liquidity conditions in the US and foreign financial markets, by providing foreign central banks with the capacity to deliver US dollar funding to institutions in their jurisdictions during times of market stress.
The international program has expired and a review of the RBA’s participation is no longer needed given the improvements in the financial markets seen over the last year.
In April 2009, the FOMC subsequently authorised further liquidity swap lines with additional central banks including the RBA.
The swap lines were designed to improve liquidity conditions in the US and foreign financial markets, by providing foreign central banks with the capacity to deliver US dollar funding to institutions in their jurisdictions during times of market stress.
The international program has expired and a review of the RBA’s participation is no longer needed given the improvements in the financial markets seen over the last year.
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