The Federal Reserve has set up a program to
exchange dollars for foreign currency with nine
central banks to support dollar lending in global
markets that are under pressure from the impact
of the viral outbreak.
The move, announced Thursday, enables foreign
banks to provide dollars to their banks that
sometimes lend and trade in US currency.
It is the latest effort by the Fed to smooth the
functioning of financial markets, as investors,
banks, and companies rush to stockpile cash
amid plunging stock markets and a sharply
slowing economy. Late Wednesday, the Fed also
reactivated its third lending facility dating from
the financial crisis intended to provide more
cash to banks in the form of short-term loans.
The currency swaps established Thursday are
capped at $60 billion for six central banks in
Australia, Brazil, Mexico, Singapore, Korea and
Sweden. The exchange lines are capped at $30