​The mechanism introduced by the US Federal Reserve System to give foreign central banks access to dollar funding was accessed at a record price in the context of a week of stress in the banking sector that affected financial markets around the world, Bloomberg reports, citing Agerpres.

The record demand of $60 billion for the repo mechanism of foreign and international monetary authorities was from March 15 to 22.

The Fed did not provide information on the banks that had access to the facility.

“Someone, somewhere needs funding in dollars,” says Antoine Bouvet, chief analyst at ING Bank NV. He notes that “this is not a big concern at the moment, given the way currency swaps are playing out and the low access to dollar currency lines.”

The mechanism, proposed by the US Federal Reserve System, was put in place during the pandemic and designed to reduce any pressure on global dollar funding markets.

The tool allows foreign central banks to use their holdings of US Treasuries as collateral for dollar liquidity, which is in high demand during times of stress in the financial sector.

The Fed’s latest surge in demand for dollars came as concerns about the fragile health of the banking sector spread from the US to Europe, culminating in the emergency takeover of Swiss bank Credit Suisse Group AG by rival UBS.