Washington: The Federal Reserve, in coordinated action with foreign central banks, today plowed $30 billion into money markets overseas, part of an ongoing effort to fight a global credit crisis.
The Fed’s action taken at 1030 IST sets up temporary “swap” arrangements to supply dollars to the central banks of Australia, Denmark, Norway and Sweden in exchange for their currencies.
“These facilities, like those already in place with other central banks, are designed to improve liquidity conditions in global financial markets,” the Fed said in a brief statement.
“Central banks continue to work together during this period of market stress and are prepared to take further steps as the need arises,” the Fed added.
The new swap arrangements will provide up to $10 billion each to the central banks of Australia and Sweden and $5 billion apiece to the central banks of Denmark and Norway.
Last week, the Fed and other foreign central banks pumped as much as $180 billion into money markets overseas. The European Central Bank, the Bank of Japan, the Bank of England, the Swiss National Bank and the Bank of Canada participated in that maneuver.
The global credit crisis poses a danger not only to the US economy but also the world economy.
Finance officials from the world’s major economic powers pledged this week to do all they can to provide relief.