# Central Banks Use Swap Lines to Maintain the Flow of US Dollar | Yale School of Management

> The Fed and other major central banks used coordinated swap lines to provide more global US dollar liquidity as dollar funding markets came under stress from COVID-19. The piece describes how swap agreements work and reviews past crisis programs. It also lists features countries consider when entering a swap line.

- Date: 2020-03-26 · published 2020-03-26T12:00:00.000Z
- Category: policy · region Global · magnitude medium
- Page: https://feedsoft.ai/events/6587-central-banks-use-swap-lines-to-maintain-the-flow-of-us-dollar-yale-school-of
- Commodities: [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md)

## Why it matters

Swap lines ease dollar funding shortages that can force selling of assets and commodities. Stabilized dollar liquidity reduces the risk of a sudden dollar spike that would hurt dollar-priced commodities.

## Read by commodity

- DXY: neutral

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| DXY | 2020-03-31 | 5 | -2.4% | -3.3 | Expanded central bank swap lines supplied dollar liquidity and reduced the scramble for dollars. |
| DXY | 2020-03-26 | 1 | -1.9% | -4.8 | Coordinated central bank swap lines expanded dollar liquidity on the same date, easing the dollar funding squeeze and reducing safe-haven dollar demand. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| DXY | 2017-01-01 | [China tweaks yuan basket to play down US dollar \| South China Morning Post](https://feedsoft.ai/events/73191-china-tweaks-yuan-basket-to-play-down-us-dollar-south-china-morning-post.md) | +0.1% | -1.7% |
| DXY | 2020-03-03 | [Too early for U.S. dollar sell-off despite Fed rate cuts - Reuters poll](https://feedsoft.ai/events/6187-too-early-for-u-s-dollar-sell-off-despite-fed-rate-cuts-reuters-poll.md) | +0.3% | +5.5% |
| DXY | 2025-05-30 | [EUR/USD pares gains with markets cautious ahead of the US PCE Prices Index report](https://feedsoft.ai/events/24908-eur-usd-pares-gains-with-markets-cautious-ahead-of-the-us-pce-prices-index.md) | -0.5% | -1.6% |
| DXY | 2026-01-28 | [Be careful what you wish for on a weaker dollar \| Reuters](https://feedsoft.ai/events/10162-be-careful-what-you-wish-for-on-a-weaker-dollar-reuters.md) | +0.4% | +0.3% |
| DXY | 2021-08-27 | [OPEC+ faces mixed market signals after US pressure to increase oil supplies \| S&P Global](https://feedsoft.ai/events/45474-opec-faces-mixed-market-signals-after-us-pressure-to-increase-oil-supplies-s.md) | -0.9% | -0.0% |

## Sources

- som.yale.edu: https://som.yale.edu/blog/central-banks-use-swap-lines-to-maintain-the-flow-of-us-dollar

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.