World's leading central banks are in the process of stopping their US dollar liquidity provisions for lenders, which were put in place during the financial crisis that started in 2008.
The European Central Bank, in cooperation with the Bank of England, the Bank of Japan and the Swiss National Bank, has decided to end the conduct of US dollar liquidity-providing operations, the Frankfurt-based ECB said on Friday.
"In view of the considerable improvement in US dollar funding conditions and the low demand for US dollar liquidity-providing operations,... central banks will gradually reduce their offering of US dollar liquidity-providing operations," the ECB said.
The central banks will continue to conduct US dollar liquidity-providing operations with a maturity of three months until April 30. They will also continue with the one-week tender until July 31.
The ECB said it will assess the need to continue the one-week tender beyond July 31. The central bank pointed out that the recently established standing swap lines provide a framework for the reintroduction of US dollar liquidity-providing operations if warranted by market conditions.
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