Macro Musings with David Beckworth cover image

Brad Setser on Addressing the Global Dollar Shortage and COVID-19’s Implications for Worldwide Trade Imbalances

Macro Musings with David Beckworth

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Is There a Need for a Repo Facility?

The Fed should also offer a repo facility for those central banks that have substantial amounts of dollar reserves already. The most obvious case is China, but the same basic point applies to Taiwan, Hong Kong and India. In a crisis, you don't really lend out a treasury, you lend out a dollar. A repo facility is a way for allowing these countries central banks to get a dollar directly from the Fed rather than get a dollar from the US banking system.

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