Discussion Paper

Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?


Abstract: In March 2020, the Federal Open Market Committee (FOMC) made changes to its swap line facilities with foreign central banks to enhance the provision of dollars to global funding markets. Because the dollar has important roles in international trade and financial markets, reducing these strains helps facilitate the supply of credit to households and businesses, both domestically and abroad. This post summarizes the changes made to central bank swap lines and shows when these changes were effective at bringing down dollar funding strains abroad.

Keywords: dollar; swap; central banks; COVID-19;

JEL Classification: E5; E51;

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2020-05-22

Number: 20200522