Six Major Central Banks Permanently Made Currency Swap Accords

Nov 1, 2013 11:47 IST

Six major central banks in the world made currency swap arrangements permanent on 31 October 2013 as a prudent liquidity backstop  in case of future global financial strains.
Previously these banks had temporary bilateral currency swap arrangements.

Names of Six major central banks

1. The Bank of Japan
2. U.S. Federal Reserve
3. European Central Bank
4. Bank of England
5. central bank of Canada
6. central bank of Switzerland

About Currency Swap

A currency swap is a foreign-exchange agreement between two institutions /Countries to exchange aspects (namely the principal an interest payments) of a loan in one currency for equivalent aspects of an equal in net present value loan in another currency.

About Central bank liquidity swap

Central bank liquidity swap/Currency is a type of currency swap used by a country's central bank to provide liquidity of its currency to another country's central bank.

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Read more Current Affairs on: central banks , Currency Swap

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