Fed Extends EM Swap Lines

The Federal Reserve says it is extending its liquidity programs to four EM countries, including Brazil and Mexico, by six months through October in light of the continuing strains in many financial markets. The program supports the provision of USD liquidity in amounts of up to $30bn each, according to the Fed. “The big news would have been if the program was ended,” says Rodrigo Valdes, chief LatAm economist for Barclays. “This just means we’re not out of the woods in terms of the global financial condition,” he adds. The Fed is providing similar lines to other central banks, including the ECB and ones in Australia, New Zealand, Denmark, the UK, and Switzerland.