Reserve Bank of Australia and US Federal Reserve Announce Swap Arrangement

The Reserve Bank of Australia and the Federal Reserve will establish a temporary reciprocal currency arrangement (swap line) for the provision of US dollar liquidity. The Federal Reserve will also establish temporary arrangements with the Banco Central do Brasil, the Danmarks Nationalbank, the Bank of Korea, the Banco de Mexico, the Norges Bank, the Reserve Bank of New Zealand, the Monetary Authority of Singapore and the Sveriges Riksbank. These arrangements are designed to help lessen strains in global US dollar funding markets.

The Federal Reserve also has standing US dollar swap lines with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank.

The Reserve Bank of Australia and the Federal Reserve will establish a US$60 billion swap line to provide US dollars in exchange for Australian dollars. The US dollars will be made available to local market participants by the Reserve Bank in US dollar repurchase agreements (repos) against Australian dollar-denominated securities. The US dollar repos will be allocated through an auction process.

The Reserve Bank of Australia will announce its US dollar repo auctions via the electronic news services (Reuters – RBA37, Bloomberg – RBAO08). Operational details for participants in these auctions will be made available shortly as a Technical Note on US Dollar Repos.

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