FT News Briefing Gillian Tett on Fed dollar scheme, Covid-19 testing
Apr 1, 2020
Gillian Tett delves into the Federal Reserve's strategy to boost global access to dollars, highlighting the impact of currency demand amid economic uncertainty. Clive Cookson contrasts the efficient COVID-19 testing responses in Germany and South Korea with those of the US and UK. Meanwhile, Donald Trump plans to pause certain tariffs to mitigate economic fallout, UK banks are halting dividend payments under regulatory pressure, and a record number of developing countries seek relief from the IMF as the pandemic spreads.
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Dollar Demand
- The US dollar's value has risen as investors seek safe assets during the pandemic.
- Companies also hold dollars to offset revenue losses from economic shutdowns.
Fed's Dollar Swap Facility
- The Federal Reserve introduced a new facility (FIMA) for foreign institutions.
- This allows them to swap treasuries for dollars to meet global demand.
Fed's Bold Action
- The Fed's actions show its commitment to global financial stability.
- This is surprising given potential opposition based on America First policies.