America’s central bank is not the only one doling out greenbacks

WHEN AMERICA and its allies wanted to cheapen the dollar in 1985, their officials met in the Plaza Hotel in New York. When they sought to stabilise the currency two years later, they gathered in the Louvre Palace in Paris, conversing over turbot soufflé cardinale washed down with Puligny Montrachet, according to Funabashi Yoichi, a former journalist. The dollar is again a cause of international concern, strengthening from March 9th to 20th, as companies, banks and countries scrambled for the world’s dominant currency, before falling a little this week. But if the world’s policymakers wish to tame it again, where will they meet? In a time of lockdowns, any successor to the Plaza and Louvre accords will have a less resonant name.

America’s Federal Reserve has already tried to alleviate dollar scarcity by reviving a network of swap lines, which allow other central banks to borrow dollars in exchange for the equivalent amount in their own currencies, swapping them back again up to three months later. The Fed eased the terms of its existing lines with Britain, Canada, the euro area, Japan and Switzerland. It then reintroduced lines with nine other central banks, including those of Australia, Brazil, Mexico, New Zealand, Singapore and South Korea.

Many of these central banks are now busily furnishing dollars to banks at home...



via The Economist: Finance and economics Business Feeds

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