Bank / Credit Union

US dollar swap with foreign central banks extended

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December 17, 2020

In the early stages of the pandemic, The Federal Reserve set up a $60 billion swap of U.S. dollars for foreign currency with the central banks of Australia, Brazil, South Korea, Mexico, Singapore and Sweden to ease global financial stress and help prevent certain countries from going into a recession.

Additionally, it set up $30 billion swap line with the central banks of Denmark, Norway and New Zealand, according to a report from Reuters.

At the same time, the Fed offered dollar loans to foreign central banks as long as they could post U.S. Treasury bonds as collateral.

The Federal Reserve has now decided to extend the swap lines for approximately nine foreign central banks until Sept. 30, 2021.