The Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided to discontinue offering U.S. dollar liquidity at the 84-day maturity, starting in July. These central banks will continue to hold weekly operations with a 7-day maturity. Demand for the U.S. dollar , the world’s reserve currency, becomes intense during periods of financial turbulence. “The swap lines among these central banks are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad,” said the European Central Bank in a statement.
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