April 5, 2012 / 8:27 PM / 5 years ago

NY Fed-FX swaps with foreign cenbanks at $9.131 bln in latest wk

NEW YORK, April 5 (Reuters) - The Federal Reserve provided $9.131 billion in liquidity to foreign central banks this week under the currency swap line facility, the New York Fed said on Thursday.

The European Central Bank was the sole institution to tap the swap lines this week, swapping the full $9.131 billion.

The terms for the ECB swap were seven days at 0.63 percent, totaling $2.881 billion. The other ECB swap was for 84 days at 0.63 percent, totaling $6.250 billion.

The Federal Reserve has established swap arrangements with the Bank of Canada, the Bank of England, the European Central Bank, the Swiss National Bank, and the Bank of Japan.

The swap facilities respond to the re-emergence of strains in short term funding markets in Europe. They are designed to improve liquidity conditions in global money markets and to minimize the risk that strains abroad could spread to U.S. markets, by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions, according to the Fed.

The swap lines with the ECB, BOE, SNB and BOJ will provide these central banks with the capacity to conduct tenders of U.S. dollars in their local markets at fixed local rates for full allotment.

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