The deal will have the Fed provide $10 billion to the European Central Bank and $3 billion to the Swiss National Bank. In return, it will receive a reciprocal amount of foreign currency from each country.
The $13 billion comes on top of the $277 billion in such swap deals that had previously been announced, including $110 billion with the ECB and $27 billion with the Swiss National Bank.
Friday's action helps provide dollars to foreign banks that needed the U.S. currency to transact business but had been unable to access the Fed directly the way U.S. banks can.
The three central banks said the latest action is designed to help banks that needed access to the cash to close transactions at the end of the third quarter, which concludes on Tuesday.
The Fed has been taking steps to pump dollars into the U.S. financial system as well, lending out more than $140 billion over the course of the last week.
Figures released Thursday showed that borrowing by Wall Street securities firms totaled $105.7 billion as of Wednesday, up from $59.8 billion a week earlier.
In addition, under an emergency program unveiled by the banks last week, commercial banks borrowed $72.7 billion through Wednesday in order to buy commercial paper from money-market mutual funds.
And loans through the traditional discount window rose to $39.3 billion, up $5.9 billion from a week earlier. Other credit extensions jumped by $16 billion to $44 billion.
The moves come as banks and Wall Street firms have become reluctant to lend money to each other, or to customers. There are reports of banks hoarding cash out of concerns about their own future as well as uncertainty about the financial condition of other institutions.
That resulting freezing of credit and financial markets has prompted the Treasury Department and Fed to push for a $700 billion bailout package that would have the government buy mortgage-backed securities whose value has plunged in the face of sliding home prices and climbing foreclosures.
Congressional negotiators were reportedly close to a deal Thursday to win bipartisan approval of the bailout package but objections from House Republicans have thrown the status of those talks into doubt.
The announcement also came the day after Washington Mutual was taken over by the Federal Deposit Insurance Corp., making it the largest bank failure in U.S. history. The nation's largest thrift was then sold to JPMorgan Chase (JPM, Fortune 500).
Central banks pump up the dollars
