Global Markets
How Central Bank Currency Swap Lines Work, From First Exchange to Bank Lending
Currency swap lines are standing agreements between central banks that allow them to borrow each other's currency, serving as a critical tool for providing dollar liquidity to foreign commercial banks during times of financial stress. The article details their step-by-step mechanics, historical evolution from dollar defense to a global safety net, and their crucial role in managing crises like the GFC and COVID-19.
Arthur Sterling·October 23, 2026
