ECB: International central banks move to improve global dollar liquidity
International central banks Thursday announced new coordinated measures to address pressures in US dollar funding markets, the European Central Bank said.
The central banks involved in the coordinated moves include the Bank of Canada, the Bank of England, the ECB, the Federal Reserve, the Bank of Japan, and the Swiss National Bank. The measures are designed to "improve the liquidity conditions in global financial markets," the ECB said.
The ECB said it will offer overnight dollar funds of up to $40bn (€28bn) provided by a reciprocal currency swap arrangement with the US Federal Reserve.
In addition, the ECB said it would widen the dollar amount offered in its 28-day term auction facility to $25bn, and to $15bn for the 84-day dollar auctions.
"Overall, the dollar funding operations conducted by the Eurosystem could reach an outstanding amount of $110bn, compared to the current $50bn," the ECB said.
Already Thursday, the ECB offered overnight dollar funds with an intended volume of $40bn, to be allotted at a single rate.
Following the announcement, overnight euro interbank rates receded to 4.37%, from 4.55% in early morning trade, well in excess of the ECB's 4.25% policy rate.
-- Write to nikki.houston@dowjones.com ; +49 69 29 725 520
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