Central banks return to the frequency of dollar injections prior to the Credit Suisse crisis

The Bank of England, the Bank of Japan, the European Central Bank (ECB) and the Swiss National Bank, in consultation with the United States Federal Reserve (Fed), jointly decided to reverse the frequency of their operations to inject dollar liquidity into view of the improvements in the financing conditions of the US currency.

In this way, the frequency of these operations to inject liquidity in dollars will once again be weekly instead of daily, as has been the case since the big central banks announced the change in frequency on March 19, coinciding with the Credit bailout. Suisse and the financial turmoil in the United States.

In a statement, the institutions have justified the return to the usual frequency of operations prior to the Credit Suisse rescue due to “the improvements in financing conditions in US dollars and the low demand in recent operations to provide liquidity in dollars”.

Likewise, the central banks assured that they remain ready to readjust the provision of liquidity in US dollars as justified by market conditions.

The swap lines between these central banks are permanent facilities available and serve as an important liquidity support to alleviate tensions in the global financing markets, which helps to mitigate the effects of such tensions on the supply of credit to households and companies. , both nationally and internationally.

K. Tovar

Source: Confidencial digital

(Reference image source: file)

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