Fed extends temporary U.S. liquidity swap lines, repo facility through March 2021

The Federal Reserve’s temporary U.S. dollar liquidity swap lines and temporary repurchase agreement facility for foreign and international monetary authorities (FIMA repo facility) established in March to help ease the effects on funding markets from the coronavirus (COVID-19) pandemic have been extended through March 31, 2021, the Fed announced Wednesday.

“The extensions of these facilities will help sustain recent improvements in global U.S. dollar funding markets by maintaining these important liquidity backstops,” the Fed said in a release. “In addition, the FIMA repo facility will help support the smooth functioning of the U.S. Treasury market by providing an alternative temporary source of U.S. dollars other than sales of securities in the open market.”

The extension of the temporary swap lines applies to all nine central banks previously announced by the Fed March 19. The swap lines allow the provision of U.S. dollar liquidity in amounts up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank (Sweden). They allow the provision of U.S. dollar liquidity in amounts up to $30 billion each for the Danmarks Nationalbank (Denmark), the Norges Bank (Norway), and the Reserve Bank of New Zealand.

The Fed originally announced the FIMA repo facility March 31. “Its extension will allow approved FIMA account holders to continue to temporarily exchange their U.S. Treasury securities held with the Federal Reserve for U.S. dollars, which can then be made available to institutions in their jurisdictions,” the Fed said.

Federal Reserve Board announces the extensions of its temporary U.S. dollar liquidity swap lines and the temporary repurchase agreement facility for foreign and international monetary authorities (FIMA repo facility) through March 31, 2021

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