Chris, what are currency swaplines?

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daleasberry's picture
Status: Martenson Brigade Member (Offline)
Joined: Oct 29 2008
Posts: 28
Chris, what are currency swaplines?

Found the following Official Currency “Swapline” Q&A **SHOCKING ADMISSIONS** and it seems quite interesting, but I'm not fully following the impact of swaplines.

Another site found that the Fed has initiated swaplines, authorized through April 30, 2009, with the following banks:

Reserve Bank of Australia
Bank of Canada
Danmarks Nationalbank
Bank of England
European Central Bank
Bank of Japan
Reserve Bank of New Zealand
Norges Bank
Sveriges Riksbank
Swiss National Bank
Banco Central do Brasil
Banco de Mexico
Bank of Korea
Monetary Authority of Singapore

 Why would the Fed suddenly be concerned that these banks won't be able to get dollars through normal market access - especially considering how they've been flooding the market with liquidity?

cat233's picture
Status: Platinum Member (Offline)
Joined: Aug 20 2008
Posts: 575
Re: Chris, what are currency swaplines?
A currency swap is a transaction where two parties exchange an agreed amount of two currencies while at the same time agreeing to unwind the currency exchange at a future date.

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