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 six major central banks permanently.
- The Bank of Japan
- U.S. Federal Reserve
- European Central Bank
- Bank of England
- central bank of Canada
- 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.