Brasília – The Central Bank of Brazil (BC) and the US central bank, Federal Reserve (Fed) will maintain a US dollar liquidity arrangement (swap lines) for at least six months. The provision amount to USD 60 billion and will increase the supply of the US currency in the domestic market, BC reported on Thursday (19).
According to the Brazilian bank, the amount will be used to “increase the available funds for the USD dollar liquidity provision operations.” “The liquidity swap line adds up to the collection of tools available for the BC to deal with the high volatility of the markets due to the Covid-19 pandemic,” it added.
Fed has established arrangements with the central banks of Australia, Denmark, South Korea, Mexico, Norway, New Zealand, Singapura, and Sweden, too. It also has standing US dollar liquidity swap lines with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank.
Translated by Guilherme Miranda
