The U.S. Federal Reserve on Tuesday made another move to shore up financial markets, announcing a new facility that will allow foreign central banks to swap U.S. Treasuries temporarily for dollars.

The Fed’s FIMA Repo Facility reflects concerns over stresses in U.S. dollar markets as companies and governments around the world scramble for the safe haven of greenbacks amid the coronavirus crisis.

Foreign central banks that have accounts at the New York Fed will now be able to temporarily raise dollars by selling Treasuries to the Fed’s System Open Market Account and agreeing to buy them back at the maturity of the repurchase agreement.

The Fed, in effect, will make overnight dollar loans to the central banks, taking U.S. Treasury debt as collateral.

“By allowing central banks to use their securities to raise dollars quickly and efficiently, the facility will also support local markets in U.S. dollars and bolster broader market confidence,” the Fed said in a statement. “Stabilizing foreign dollar markets, in turn, will support foreign economic conditions and thereby benefit the U.S. economy through many channels, including confidence and trade.”

As the Washington Post reports, the Fed’s goal is “to prevent foreign central banks from selling their U.S. Treasury holdings in a rush. There was so much panic selling in mid-March that investors were often selling both stocks and bonds, a highly rare situation, as typically investors flee stocks and run to the safety of bonds.”

“The U.S. dollar has also risen swiftly in value in March as foreign investors and governments view the dollar as the safest currency right now. The Fed’s latest action should help central banks obtain dollars quickly,” the Post added.

The FIMA repo facility, which will be available for six months starting April 6, is the seventh liquidity facility that the Fed has offered as it continues to battle the economic effects of the coronavirus.

FIMA account holders already use the New York Fed for services such as clearing, settlement, and gold safekeeping.

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