Discussions with countries, including our Gulf and Asian allies, about U.S. dollar swap lines are part of ongoing, routine conversations that @USTreasury has been having with our partners over a number of years. They are a testament to the U.S. dollar’s primacy and the strength of America’s economic shield.
Additional swap lines can benefit our nation by reinforcing dollar usage and liquidity internationally, maintaining smooth functioning in dollar funding markets, promoting trade and investment with the United States, and, in hypothetical stress scenarios, preventing disorderly sales of U.S. assets as well as disruptions to U.S. markets, businesses, and households.
Many of these countries have pristine sovereign balance sheets and large dollar holdings – larger than many major economies with whom we maintain permanent swap facilities. I applaud our allies’ foresight and watchful risk management by exploring additional financial buffers during periods of market quiescence.
Extending permanent swap lines can be a major first step in creating new U.S. dollar funding centers in the Gulf and Asia.
Dollar dominance and reserve currency status are strengthened by constant long-term initiatives, including countering the growth of problematic, alternative payment systems.
Under @POTUS, this is American Economic Leadership at work.