Coordinated central bank action to enhance the provision of U.S. dollar liquidity

The Board of Governors of the Federal Reserve System (FED) has published a press release to inform that the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Swiss National Bank, and the FED itself have initiated a coordinated effort to increase the supply of U.S. dollar liquidity through existing U.S. dollar swap arrangements. Specifically, to increase the effectiveness of the swap lines in providing U.S. dollars, the central banks have agreed to increase the frequency of seven-day maturity operations from weekly to daily. These daily operations will begin on March 20, 2023, and continue at least through the end of April 2023. The network of swap lines between these central banks serves as an important liquidity reserve to cushion tensions in global funding markets and helps to mitigate the impact of such tensions on the supply of credit to households and businesses at home and abroad.