ECB extends liquidity lines with non-euro central banks
19 December 2022 Europe
Image: NeoLeo/stock.adobe.com
The European Central Bank (ECB) has extended its temporary repo lines with several non-euro central banks, as well as its temporary swap line with Poland.
Due to expire on 15 January 2023, the repo and swap lines have been extended to 15 January 2024. The size and operational parameters of the individual agreements will remain unchanged.
The decision by ECB’s governing council will see Albania, Andorra, Hungary, North Macedonia, Romania and San Marino continue to benefit from the bank’s repo line.
This line allows non-euro area central banks to borrow euro up to a specified limit in exchange for euro-denominated collateral.
Under a swap line, a non-euro area central bank can borrow euro up to the limit in exchange for its own currency, which is provided as collateral.
These bilateral swap and repo lines have been established since 2020 to provide euro liquidity to financial institutions via non-euro area central banks in view of the COVID-19 pandemic and heightened geopolitical tensions triggered by Russia’s invasion of Ukraine.
In respect of the persistent uncertainty stemming from Russia’s ongoing war in Ukraine and the associated economic and financial repercussions on the global economy and financial markets, the lines are designed to prevent spillover effects in euro-area financial markets and economies and safeguard the transmission of the ECB’s monetary policy.
Due to expire on 15 January 2023, the repo and swap lines have been extended to 15 January 2024. The size and operational parameters of the individual agreements will remain unchanged.
The decision by ECB’s governing council will see Albania, Andorra, Hungary, North Macedonia, Romania and San Marino continue to benefit from the bank’s repo line.
This line allows non-euro area central banks to borrow euro up to a specified limit in exchange for euro-denominated collateral.
Under a swap line, a non-euro area central bank can borrow euro up to the limit in exchange for its own currency, which is provided as collateral.
These bilateral swap and repo lines have been established since 2020 to provide euro liquidity to financial institutions via non-euro area central banks in view of the COVID-19 pandemic and heightened geopolitical tensions triggered by Russia’s invasion of Ukraine.
In respect of the persistent uncertainty stemming from Russia’s ongoing war in Ukraine and the associated economic and financial repercussions on the global economy and financial markets, the lines are designed to prevent spillover effects in euro-area financial markets and economies and safeguard the transmission of the ECB’s monetary policy.
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