Charted: rush for dollar liquidity fades

dollars-perspective

Demand for US dollars in central bank repo operations worldwide has been on the decline in recent weeks, after the opening stages of the Covid-19 crisis created intense strains in funding markets.

Figures initially compiled by Central Banking and later published by the New York Fed show a dramatic spike in demand for dollar repos during the opening stages of the pandemic (figure 1).

Dollar funding markets began to seize up. Dislocations such as a widening cross-currency basis began to appear

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