The Federal Reserve today announced plans to supply credit to the central banks in Brazil, Mexico, Korea and Singapore to help those four “large and systemically important economies” deal with the global liquidity crisis.
Under the plan, the Fed will provide up to $30 billion to the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore, in the latest series of “swap” arrangements in which it provides dollars in exchange for reserves of the other nations' currencies.
The facilities are “designed to help improve liquidity conditions in global financial markets” and to “mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well managed economies.”
The Fed had previously authorized reciprocal swap arrangements with the central banks of Australia, Canada, Denmark, England, Japan, New Zealand, Norway, Sweden and Switzerland, and the European Central Bank (InvestmentNews, Sept. 29).
In another announcement, the Fed said it supported the International Monetary Fund's decision to create a Short-Term Liquidity Facility, which is designed to help member countries that are facing temporary liquidity problems.
“The Federal Reserve is supportive of the IMF's role in helping countries address and resolve their ongoing economic and financial difficulties,” according to the statement.
No comments:
Post a Comment