ECB opens repo lines with Northern Macedonia and San Marino
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ECB opens repo lines with Northern Macedonia and San Marino 18 August 2020Frankfurt Reporter: Natalie Turner
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The European Central Bank (ECB) has agreed two new repo lines to support European nations with liquidity following the market dysfunctions of the COVID-19 shock.
Today, the National Bank of the Republic of North Macedonia has agreed to set up a €400 million repo line arrangement to provide euro liquidity to the Balkan nation’s financial institutions.
Additionally, the ECB and Central Bank of the Republic of San Marino have also set up a €100 million repo line.
Both lines are set to remain in place until June 2021 unless they are extended.
Under a repo line, the ECB provides euro liquidity to non-euro area central banks in exchange for adequate euro-denominated collateral.
In recent months, the ECB also created repo lines with the central banks of Serbia, Albania and Romania.
Earlier this year, the ECB set up a new backstop facility, known as the Eurosystem repo facility Eurosystem repo facility for central banks (EUREP), to provide precautionary euro repo lines to central banks outside the euro area.
The new facility is the ECB’s latest effort to combat the market instability wrought by the pandemic in Europe and around the globe.
EUREP addresses possible euro liquidity needs in case of market dysfunction resulting from the COVID-19 shock that might adversely impact the smooth transmission of ECB monetary policy.
This facility will also remain in place until June 2021.
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