ECB to offer euro liquidity to foreign central banks from Q4

The European Central Bank has begun onboarding non-euro area central banks into a new enhanced repo facility, with the first liquidity draws expected in the final quarter of 2026. The move formalises the operational backbone of a system designed to supply euros to foreign institutions in need.

Under the EUREP framework, foreign central banks will be able to borrow euros against high-quality euro-denominated collateral. The loans will carry maturities between one day and one week, though these can be extended if necessary. Each individual central bank will be capped at a maximum line size of €50 billion.

To protect the Eurosystem, borrowing costs will sit at the ECB's main refinancing operations rate plus a spread set by the Governing Council. This spread is structured to preserve the backstop character of the facility, ensuring it acts as a safety net rather than a primary funding source. The ECB has also put appropriate risk mitigants in place to guard against losses.

Operations will be managed across the euro area's largest financial hubs. The Deutsche Bundesbank, Banco de España, Banque de France, Banca d’Italia, and De Nederlandsche Bank will execute the trades under the direct coordination of the ECB. To maintain transparency, the central bank will publish the total daily liquidity provided under EUREP and its swap lines on a weekly basis.

Access to the system is broad. The ECB states the facility is in principle open to all central banks and monetary authorities outside the euro area. The only explicit exclusions apply to institutions flagged for money laundering, terrorist financing, or sanctions. Once onboarded, these central banks face no upfront restrictions on how they deploy the funds.

For European investors and markets, the significance of EUREP lies in its structural support for the currency. By guaranteeing a standing source of euro liquidity for foreign central banks, the ECB is supporting the smooth transmission of its monetary policy beyond the euro area's borders. Furthermore, the facility represents a clear step to reinforce the international role of the euro in global trade and reserves.

By combining high-quality collateral requirements with a pricing structure designed to discourage routine use, the ECB is offering a global liquidity backstop. The framework allows the central bank to support the international role of the euro while maintaining strict control over its risk exposure.