Working group minutes: central banks face balance sheet challenges
Some institutions are struggling to absorb large amounts of excess liquidity
Many central banks face challenges in handling large amounts of excess liquidity in their financial systems, whether due to crisis-fighting measures or foreign exchange intervention.
Participants who joined two sessions of Central Banking’s interbank working groups on October 15 shared some of the common issues they were encountering.
One central banker from Asia-Pacific said they had experienced significant inflows of FX due to tourism. This had allowed the central bank to accumulate reserves
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