News for the American currency from the main central institutions of the planet. The European Central Bank, the Bank of Japan, the Bank of England and the Swiss National Bank have decided to gradually reduce the dollar liquidity offered to the banking system.
The ECB explains in a note that the conditions for accessing market financing in dollars "have improved markedly" and that the demand for liquidity in greenbacks recorded at auctions has decreased considerably.
Consequently, the Eurotower and the other central banks that have adhered to the cooperation agreement will cancel the three-month dollar liquidity auctions starting from 30 April, while those with a duration of one week have been confirmed at least until July 31st.
After this date, the ECB will assess whether there is still a need for seven-day swap auctions based on the recent refinancing agreements which allow for the reintroduction of this type of operation if required by market conditions.
The dollar swap auctions were decided during the height of the financial crisis and maintained since then due to the difficulties encountered by banks in obtaining dollar funds on the market.
In recent months, however, requests from this type of branch have gradually dried up, so much so that the seven-day swap auction in dollars organized by the ECB has long been deserted due to lack of demand.
