Fed; along with the Central Banks of Europe, Japan, the UK, Canada and Switzerland, had converted the frequency of 7-day maturity transactions from weekly to daily, to increase the efficiency of swap lines to keep the USD liquidity easy worldwide. The current will be effective from 23 March until the end of April for now… Central banks will also continue their 84-day maturity transactions per week.
In order for the market to overcome the USD liquidity tightness and to facilitate access to funding, Central banks focused on the swap mechanism in a coordinated manner. The Fed also included 9 developed and emerging country central banks in this coordination, which it started with 6 big central banks.
The reactions of the market at this point will be more related to the access to USD funding and liquidity tightness. A significant portion of the recent strengthening of the USD came from this factor.
Kaynak: Tera Menkul
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