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Did the Fed’s Dollar Swap Lines Work?
In a previous blog post, we explained two of the Federal Reserve’s recent actions in the international capital market: the expansion of its dollar swap lines and the creation of the Foreign and International Monetary Authorities (FIMA) repo facility.1 These actions made it easier for foreign central banks to obtain U.S. dollars and potentially alleviated dollar shortages caused by an increased demand for the dollar during the COVID-19 recession. But were these policies truly effective? To find out, we analyzed cross-currency bases between U.S. dollars and select international currencies. What Are Cross-Currency ... (full story)