ECB and BoE announced to activate currency swap arrangements ahead of Brexit. Under the arrangement, BoC will offer to lend Euro to UK banks on a weekly basis. BoE will also obtain Euro from ECB in exchange for Sterling. Also, Eurosystem would stand ready to lend Sterling to Eurozone banks if needed.
ECB said “the activation marks a prudent and precautionary step by the Bank of England to provide additional flexibility in its provision of liquidity insurance, supporting the functioning of markets that serve households and businesses.”
