March 24, 2020 / 8:23 PM / 8 days ago

UPDATE 2-Nordic central banks to auction U.S. dollars on March 26

(Adds announcement by central banks of Norway and Denmark)

COPENHAGEN/STOCKHOLM/OSLO, March 24 (Reuters) - Central banks in Denmark, Sweden and Norway will auction U.S. dollars to banks and other financial institutions on Thursday in an effort to cushion the economic effects of the coronavirus outbreak, the Swedish central bank said on Tuesday.

In a coordinated auction between the three banks, Sweden’s Riksbank said it would offer loans worth up to $10 billion, Norway’s Norges Bank loans worth up to $5 billion and Denmark’s Nationalbanken loans worth up $20 billion.

All three banks would offer loans with a maturity of three months on Thursday. Denmark will in addition offer loans with a maturity of one week.

The move comes after the U.S. Federal Reserve last week opened up swap lines to nine central banks including those of Denmark, Norway and Sweden to tap up to a combined total of $450 billion.

“The dollar loans are one of the measures the Riksbank is offering to the banks to alleviate the negative effects on the real economy of the coronavirus pandemic,” the Swedish central bank said in a statement.

Dollars have been in huge demand - and tight supply - in markets outside the United States. The auctions will help banks, companies and governments secure dollars to service the dollar-denominated debts many have accumulated. (Reporting by Copenhagen, Oslo and Stockholm newsrooms; Editing by Mark Potter, William Maclean)

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