FRANKFURT/LONDON/TOKYO: The world’s top central banks will reduce the frequency of their dollar operations with the US Federal Reserve from May 1 after volatility in financial markets receded, the banks said in a joint statement on Tuesday.

The European Central Bank, the Bank of Japan, the Bank of England and the Swiss National Bank have been conducting daily dollar swaps with the Fed for the past month but will now revert to weekly tenders, given improvements in US dollar funding conditions they said.

The daily tenders were made available after the failure of Silicon Valley Bank and the sale of Credit Suisse sent jitters across financial markets, raising the risk of liquidity shortages in case confidence falls further.

But the facility was barely used and the take up was at or near zero on most days since the facility was announced on March 19.

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“These central banks stand ready to re-adjust the provision of US dollar liquidity as warranted by market conditions,” the ECB said in a statement.

Swap lines are liquidity backstops to ease strains in global funding markets and they have been a permanent feature of the cooperation between top central banks for more than a decade.


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