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Financial Services Law Insights and Observations

Fed extends temporary repurchase agreement facility through September 2021

Federal Issues Federal Reserve Covid-19 Of Interest to Non-US Persons

Federal Issues

On December 16, the Federal Reserve Board announced extensions of its temporary U.S. dollar liquidity swap lines, as well as the temporary repurchase agreement facility for foreign and international monetary authorities (FIMA Repo Facility), through September 31, 2021. As previously covered by InfoBytes, the FIMA Repo Facility was established in March in response to the Covid-19 pandemic to allow central banks and other international monetary authorities with accounts at the Federal Reserve Bank of New York to enter into repurchase agreements with the Federal Reserve to temporarily exchange their U.S. Treasury securities held with the Federal Reserve for U.S. dollars, which can then be made available to institutions in their jurisdictions. While the FIMA Repo Facility was originally extended through March 31, 2021 (covered by InfoBytes here), the Board states that a “further extension . . .  will help sustain recent improvements in global U.S. dollar funding markets by serving as an important liquidity backstop.”

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