Template-Type: ReDIF-Paper 1.0
Author-Name: Stefan Avdjiev
Author-X-Name-First: Stefan
Author-X-Name-Last: Avdjiev
Author-Name: Egemen Eren
Author-X-Name-First: Egemen
Author-X-Name-Last: Eren
Author-Name: Patrick McGuire
Author-X-Name-First: Patrick
Author-X-Name-Last: McGuire
Title: Dollar funding costs during the Covid-19 crisis through the lens of the FX swap market
Abstract: Since the start of the Covid-19 pandemic, indicators of dollar funding costs in foreign exchange markets have risen sharply, reflecting both demand and supply factors. The demand for dollar funding has grown in recent years, reflecting the currency hedging needs of corporates and portfolio investors outside the United States. Against this backdrop, the financial turbulence of recent weeks has crimped the supply of dollar funding from financial intermediaries, sharply lifting indicators of dollar funding costs. These costs have narrowed after central banks deployed dollar swap lines, but broader policy challenges remain in ensuring that dollar funding markets remain resilient and that central bank liquidity is channelled beyond the banking system.
Length: 8 pages
Creation-Date: 2020-04-01
File-URL: https://www.bis.org/publ/bisbull01.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/bisbull01.htm
File-Format: text/html
Number: 1
Handle: RePEc:bis:bisblt:1