The US Federal Reserve is to lend the New Zealand Reserve Bank $US15 billion, to address ongoing pressures in US short term funding markets.
The temporary currency swap line will allow the Reserve Bank to lend to domestic trading banks in US dollars.
It says the $US15 billion facility will enable domestic banks to address any problems they may have raising US dollars on overseas money markets.
The arrangement is in place until 30 April 2009.
Banks that borrow from the United States will need to repay the money in that currency.
Reserve Bank Deputy Governor Grant Spencer said the RBNZ has no immediate plans to use the facility.
However, he said "it is useful to have this capacity if markets become dysfunctional."
Radio New Zealand's economics correspondent says the arrangement is similar to others set up since the onset of the credit crunch between the Federal Reserve and other central banks, including the Bank of England and the European Cental Bank.
