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5 posts on "Dollar"
June 12, 2020

How Fed Swap Lines Supported the U.S. Corporate Credit Market amid COVID-19 Strains

The onset of the COVID-19 shock in March 2020 brought large changes to the balance sheets of the U.S. branches of foreign banking organizations (FBOs). Most of these branches saw sizable usage of committed credit lines by U.S.-based clients, resulting in increased funding needs. In this post, we show that branches of FBOs from countries whose central banks used standing swap lines with the Federal Reserve (“standing swap central banks”—SSCBs) met their increased funding needs by accessing dollars that flowed into the United States through their foreign parent banks. This volume of dollar inflows accounted for at least half of the late March aggregate take-up at SSCB dollar operations.

May 22, 2020

Have the Fed Swap Lines Reduced Dollar Funding Strains during the COVID-19 Outbreak?

In March 2020, the Federal Reserve made changes to its swap line facilities with foreign central banks to enhance the provision of dollars to global funding markets. Because the dollar has important roles in international trade and financial markets, reducing these strains helps facilitate the supply of credit to households and businesses, both domestically and abroad. This post summarizes the changes made to central bank swap lines and shows that these changes were effective at bringing down dollar funding strains abroad.

July 17, 2015

The Effect of the Strong Dollar on U.S. Growth

The recent strengthening of the U.S. dollar has raised concerns about its impact on U.S. GDP growth.

October 3, 2011

What If the U.S. Dollar’s Global Role Changed?

It isn’t surprising that the dollar is always in the news, given the prominence of the United States in the global economy and how often the dollar is used in transactions around the world (as discussed in a 2010 Current Issues article).

July 13, 2011

Would a Stronger Renminbi Narrow the U.S.-China Trade Imbalance?

The United States buys much more from China than it sells to China—an imbalance that accounts for almost half of our overall merchandise trade deficit. China’s policy of keeping its exchange rate low is often cited as a key driver of that country’s large overall trade surplus and of its bilateral surplus with the United States. The argument is that a stronger renminbi (the official currency of China) would help reduce that country’s trade imbalance with the United States by lowering the prices of U.S. goods relative to those made in China. In this post, we examine the thinking behind this view. We find that a stronger renminbi would have a relatively small near-term impact on the U.S. bilateral trade deficit with China and an even more modest impact on the overall U.S. deficit.

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