Document Type

Case Study

Case Series

Central Bank Swap Lines


In 1994 and 1995, Mexico faced a series of economic and financial disruptions that led it to repeatedly seek financial assistance from the United States and international financial organizations. This case study describes three episodes during which the US government used currency swap facilities to provide dollar funding to the Bank of Mexico (BoM), similar to Mexico’s 1982 crisis: (1) a temporary bilateral swap line established by the Federal Reserve and the Treasury on March 24, 1994, to provide emergency support following a political assassination, which the BoM did not draw upon; (2) a trilateral swap arrangement under the North American Framework Agreement (NAFA) among the US, Mexico, and Canada, which the BoM did draw upon and which remains in place; and (3) a USD 20 billion assistance package in February 1995, which included the exercise of existing short-term swap lines, medium-term swaps, and guarantees. The United States disbursed a total of USD 13 billion from this assistance package. The Bank of Mexico repaid all amounts by January 1997.