ECB and other major central banks to discontinue 84-day USD liquidity operations from July 1

ECB and other major central banks to discontinue 84-day USD liquidity operations from July developing story ...  |  23/04/2021 08:16

According to the latest press release published by the European Central Bank (ECB) on Friday, the ECB and other major central banks decided to discontinue 84-day Fed’s dollar swap lines, “in view of the sustained improvements in US dollar funding conditions and low demand at recent US dollar liquidity-providing operations.”

Additional takeaways

“The Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided to discontinue offering US dollar liquidity at the 84-day maturity.”

“This operational change will be effective as of 1 July 2021. The auction schedule until 30 June 2021, as already published, remains unchanged. From 1 July 2021 onwards, these central banks will continue to hold weekly operations with a 7-day maturity.”

“ECB and other major central banks stand ready to re-adjust provision of US dollar liquidity, including restarting 84-day operations, as warranted by market conditions.”

Market reaction

The above announcement had little to no impact on the market, as the US dollar keeps falling across the board.

The US dollar index drops 0.32% to test 91.00, at the time of writing.

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