The European Central Bank, Bank of Japan, Bank of England, Swiss National Bank and Bank of Canada all joined the Federal Reserve in increasing the frequency of seven-day maturity operations from weekly to daily, the U.S. central bank said in a statement.
The increased operations, which begin on March 23 and last through at least the end of April, will "improve the swap lines' effectiveness in providing U.S. dollar funding,” the Fed said.
The greenback is the world's reserve currency and plays a crucial rule in international transactions including lending.
The swap lines "serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad," the Fed said.
Global central banks have taken numerous steps to cushion the world economy from the fallout related to the COVID-19 pandemic, including lowering interest rates and launching or expanding asset-purchase programs.
Here in the U.S., the Fed has slashed rates by a total of 150 basis points to near zero, and launched a $700 billion asset-purchase program. The central bank has also taken measures to ensure financial markets are operating properly.