IMF highlights risks of FX swaps


Two IMF economists Bergljot Barkbu and Li Ong have exposed new risks faced by central banks using foreign exchange(FX) swaps.

In light of developments during the recent global financial crisis, the economists examine the channels through which FX swap transactions affect a country's financial and economic stability and find use of the swaps exacerbates risk in times of turmoil owing to a flight to the dollar.

According to the study, the turmoil in international money markets spilled over into FX

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