Charted: rush for dollar liquidity fades

Figures from central bank dollar repo facilities show waning demand, but outstanding swaps still high


Demand for US dollars in central bank repo operations worldwide has been on the decline in recent weeks, after the opening stages of the Covid-19 crisis created intense strains in funding markets.

Figures published by the New York Fed show a dramatic spike in demand for dollar repos during the opening stages of the pandemic (figure 1).

Dollar funding markets began to seize up. Dislocations such as a widening cross-currency basis began to appear, as banks chose to retain any dollars they held

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