Federal Reserve and Reserve Bank of New Zealand Establish Temporary Reciprocal Currency Arrangement
October 29, 2008
Circular No. 12018

The Federal Reserve and the Reserve Bank of New Zealand have announced the establishment of a temporary reciprocal currency arrangement (swap line) to address ongoing, elevated pressures in U.S. dollar short-term funding markets.  This facility, like those already established with other central banks, is designed to help improve liquidity conditions in global financial markets.

The Federal Open Market Committee has authorized the establishment of a new swap facility with the Reserve Bank of New Zealand that will support the provision of U.S. dollar liquidity in amounts of up to $15 billion. This reciprocal currency arrangement has been authorized through April 30, 2009.

The FOMC previously authorized temporary reciprocal currency arrangements with nine other central banks:  the Reserve Bank of Australia, the Bank of Canada, Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Norges Bank, the Sveriges Riksbank and the Swiss National Bank.

See the press release for full details.

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