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Reserve Bank of Australia and US Federal Reserve Announce Swap Arrangement

Summary:
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

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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.

Reserve Bank Australia
The Reserve Bank of Australia (RBA) came into being on 14 January 1960 as Australia's central bank and banknote issuing authority, when the Reserve Bank Act 1959 removed the central banking functions from the Commonwealth Bank. The bank has the responsibility of providing services to the Government of Australia in addition to also providing services to other central banks and official institutions. It currently consists of the Payments System Board, which governs the payments system policy of the bank, and the Reserve Bank Board, which governs all other monetary and banking policies of the bank.

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