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Reserve Bank of India Governor Calls for Better Access to Swap Lines

15 Oct 2017 4:42 pm
By Jason Douglas 

WASHINGTON -- The governor of the Reserve Bank of India on Sunday called on major central banks to extend their network of currency swap lines deep into emerging markets, saying a type of "apartheid" in the provision of foreign currencies hampers efforts to fight financial instability.

Urjit Patel said at a seminar hosted by the Group of Thirty in Washington that there is a "sharp asymmetry" in how central banks make their currencies available to their counterparts across the world.

Such swap lines have emerged since the financial crisis as an important tool in stabilizing the financial system by allowing stricken banks to access dollars, euros and other currencies during a funding squeeze.

Emerging markets have been largely excluded from these arrangements, he said, making them dependent on husbanding huge foreign-exchange reserves to stabilize their economies in the face of big movements of capital.

"The time has come to end this sectarian approach," Mr. Patel said.

The G30 is private group of prominent central bankers, financiers, regulators and academics.

Write to Jason Douglas at jason.douglas@wsj.com

(END) Dow Jones Newswires

October 15, 2017 12:42 ET (16:42 GMT)

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