When the ECB lends in US dollars: Central Bank swaps during COVID 19
(WorldNews Japan)

Post n°170 When the ECB lends in US dollars: Central Bank swaps during COVID 19 Published on 07/07/2020 Share links Send by email Alert by email Share Facebook Twitter LinkedIn By Julia Schmidt US dollar funding costs in foreign exchange markets rose sharply in March 2020 when the supply of US dollars in FX swap markets dried up with the onset of the pandemic. Central banks reacted quickly by activating swap lines, which enabled them to provide US dollar liquidity to banks in their jurisdictions. Chart 1: Covered Interest Parity deviations in 2020Source: Datastream, FRED. Author`s calculations. Notes: The calculations follow the standard approach, i.e. Du et al (2018), and are calculated as...