Central Banks to Engage in U.S. Dollar Swap Agreement (Update1)
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By Mayumi Otsuma

May 10 (Bloomberg) -- Central banks from the U.S., Japan and Europe will participate in temporary U.S. dollar swap agreements amid heightened tension in global financial markets, the Bank of Japan said.

“In response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe” the central banks of Canada, England and Switzerland will also participate in the re- establishment of currency swaps that were implemented during the financial crisis, the BOJ said in a statement today. “These facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers.”

Central banks “will continue to work together closely as needed to address pressures in funding markets” the BOJ said.

To contact the reporter on this story: Mayumi Otsuma in Tokyo at [email protected]
Last Updated: May 9, 2010 21:24 EDT