Central Banks Announce Swap Facilities with U.S. Federal Reserve
Today, the Federal Reserve, the Reserve Bank of Australia, Danmarks Nationalbank, Norges Bank and Sveriges Riksbank are announcing the establishment of temporary reciprocal currency arrangements (swap lines) to address elevated pressures in U.S. dollar short-term funding markets.
These facilities, like those already in place with other central banks, are designed to improve liquidity conditions in global financial markets. Central banks continue to work together during this period of market stress and are prepared to take further steps as the need arises.
Norges Bank Action
Norges Bank and the Federal Reserve have agreed on a US$5 billion swap facility (reciprocal currency arrangement) to be accessed, should the need arise, to provide U.S.-dollar liquidity in Norway. If drawn on by Norges Bank, the swap would provide liquidity facilities for use by financial institutions in Norway that are similar in nature to those that have been announced earlier by other central banks. This swap facility expires on 30 January 2009.
“This agreement provides Norges Bank with additional flexibility to address, if needed, rapidly evolving developments in financial markets. Should the swap be drawn on, the details of the liquidity facilities provided would depend on the specific market circumstances at the time. Norges Bank continues to closely monitor market developments and remains committed to providing liquidity as required to support the functioning of the Norwegian money market”, says Governor Svein Gjedrem.
Information on Related Actions Being Taken by Other Central Banks
Information on the actions taken by the other central banks is available at the following websites:
www.federalreserve.gov
www.nationalbanken.dk
www.rba.gov.au
www.riksbanken.se
Contact:
Press telephone: +47 21 49 09 30
Email: presse@norges-bank.no