FIMA Repo Facility: How It Works, Costs, and Criticisms

The FIMA Repo Facility is a standing Federal Reserve program that lets foreign central banks and other official monetary authorities borrow U.S. dollars against their holdings of U.S. Treasury securities, either overnight or for seven days. Instead of selling Treasuries into the market when they need cash, eligible institutions temporarily transfer those securities to the Fed and agree to buy them back at a set price. The facility exists so that a rush for dollars abroad does not turn into a fire sale in the world’s most important bond market.

How the Transaction Works

A foreign central bank that needs dollars sells U.S. Treasury securities from its custody account at the Federal Reserve Bank of New York to the Fed’s System Open Market Account. At the same moment, both sides commit to a repurchase at a specified price on a specified date. The maturity is either the next business day or seven calendar days out, and overnight agreements can be rolled.¹²

The trade is denominated entirely in dollars and fully collateralized by U.S. government debt, so the Fed carries essentially no foreign exchange or credit risk. Collateral is margined in a manner similar to the Fed’s discount window.¹

What It Costs to Use

Pricing is set deliberately above prevailing private repo rates so that the facility acts as a backstop rather than a cheap standing source of funding. Overnight transactions are priced at the minimum bid rate on the Fed’s Standing Overnight Repurchase Agreement Operations. Seven-day transactions are priced at the rate on overnight index swaps of a weekly maturity plus 25 basis points.¹ In calm markets, a foreign central bank can borrow more cheaply elsewhere. The facility becomes attractive when private funding tightens or seizes up.

Who Can Use It and How Much

The facility is open to FIMA account holders, meaning foreign central banks and other official monetary authorities that hold custody accounts at the New York Fed.³ The New York Fed services more than 200 foreign official and international institutions across more than 550 deposit and custody accounts, and virtually all central banks are eligible to apply, along with organizations such as the Bank for International Settlements.⁴

Eligibility is not automatic access. Each institution must be pre-approved by the Foreign Currency Subcommittee of the FOMC. When the facility launched in 2020, about 30 central banks enrolled, representing roughly 75 percent of foreign official Treasury holdings. The Fed does not publish the list of enrolled institutions or of institutions that have drawn on the facility.⁴⁵

Each approved counterparty faces a cap of $60 billion in outstanding transactions. The Foreign Currency Subcommittee can adjust the cap, the rates, the maturities, and the roster of eligible counterparties.⁶

How It Differs From the Fed’s Swap Lines

The FIMA Repo Facility is often confused with the Fed’s central bank dollar swap lines, which solve a related problem in a different way. Under a swap line, a foreign central bank borrows dollars from the Fed in exchange for its own currency, then on-lends those dollars to commercial banks in its jurisdiction, absorbing the downstream credit risk itself. Standing swap lines exist with only five major central banks — the European Central Bank, the Bank of Japan, the Bank of England, the Bank of Canada, and the Swiss National Bank — with temporary lines extended to others in crises.⁷

The FIMA facility reaches a much wider set of institutions, uses U.S. Treasuries rather than foreign currency as collateral, and runs on shorter maturities (overnight or seven days, versus up to 88 days for swap lines). Because the Fed holds Treasuries rather than a foreign currency, the credit risk profile is lower.⁸ The two tools work together: swap lines address dollar shortages inside foreign banking systems, while the FIMA facility addresses the liquidity needs of the foreign official institutions themselves.

The Problem It Was Built to Solve

The Fed announced the facility on March 31, 2020, and it went live on April 6, 2020.⁴ As the pandemic hit, foreign central banks scrambled to build precautionary dollar reserves and to supply dollars to their domestic banks. Foreign official holdings of U.S. Treasuries fell by roughly $150 billion in March 2020 and another $70 billion in April, a pace of selling that hit a Treasury market already under historic stress.⁷

Foreign central banks collectively held roughly $3.9 trillion in U.S. Treasuries at the end of 2025.⁹ If a meaningful share of that group needs dollars simultaneously and the only path to raise them is to sell Treasuries, prices fall, yields spike, and the market that anchors global finance wobbles. By giving those holders a way to raise cash against the same portfolio without selling it, the facility takes pressure off the market before it builds.

From Emergency Program to Standing Facility

The FIMA Repo Facility started as a temporary crisis measure. On July 28, 2021, the FOMC made it permanent, converting it into a standing facility on the same day it established the domestic Standing Repo Facility (SRF) for U.S.-based primary dealers and depository institutions.¹⁰⁵

The two facilities share the same basic architecture but differ in scope. The domestic SRF accepts a wider range of collateral, including agency debt and agency mortgage-backed securities, and has an aggregate limit of $500 billion. The FIMA facility accepts only Treasuries and applies its $60 billion cap per counterparty rather than as an aggregate ceiling.¹⁰

Whether Anyone Is Actually Using It

Outstanding balances are reported weekly in the Fed’s H.4.1 statistical release.¹ Because the pricing is set as a backstop, usage stays low or zero in normal conditions. The H.4.1 for the week ending March 25, 2026, showed just $2 million in outstanding “Foreign Official” repurchase agreements.¹¹ Foreign official Treasury holdings were broadly stable through 2025, moving from about $3.78 trillion at year-end 2024 to roughly $3.90 trillion at year-end 2025, consistent with no widespread dollar-liquidity strain.⁹

More detailed transaction data is published quarterly with an approximate two-year lag under the Dodd-Frank Act. Individual counterparties are not identified.¹²

Criticisms Worth Knowing

The facility has drawn far less controversy than other Fed crisis tools, largely because credit risk is minimal and usage has been low. A few concerns recur in the literature.

Moral hazard. By standing ready to calm markets, the Fed may encourage foreign officials and private participants to take on more liquidity risk than they otherwise would. One analysis warned of “less vigilance and further build-ups of risky positions, both in the US and globally.”¹³
Dollar dependence. Easier dollar access for foreign central banks can deepen global reliance on a currency they do not control. The same analysis called such facilities a “double-edged sword.”¹³
Unequal access. Institutions without significant Treasury holdings or without a FIMA account are effectively excluded. Research found that dollar-liquidity announcements reduced long-term borrowing costs only in countries with access; others saw no discernible benefit.¹³
Counterparty confidentiality. Aggregate figures are published, but the identities of enrolled and drawing institutions are not, limiting outside assessment of who benefits.

1
Federal Reserve. FIMA Repo Facility FAQs
2
CSIS. Dollars for Demand: The Fed’s New FIMA Repo Facility
3
Federal Reserve. FIMA Repo Facility
4
Yale Program on Financial Stability. United States FIMA Repo Facility
5
New York Fed. Statement Regarding Repurchase Agreement Arrangements
6
Federal Reserve. Authorization and Continuing Directives for Domestic Open Market Operations
7
Brookings Institution. What Are Federal Reserve Swap Lines
8
New York Fed. Central Bank Dollar Swap and FIMA Repo Facility
9
Federal Reserve Bank of St. Louis. Foreign Official Holdings of Treasury Securities
10
Federal Reserve. Statement Regarding Repurchase Agreement Arrangements
11
Federal Reserve. Factors Affecting Reserve Balances (H.4.1)
12
New York Fed. Repo and Reverse Repo Agreements
13
CEPR. Moral Hazard, Fear, Markets, and How Central Banks Responded to COVID-19