The swap lines substantially reduced stress in the interbank funding market for foreign currencies. The flexibility that central banks have to act when necessary, and to introduce measures as necessary, is a powerful framework in times of crisis. However, they are not permanent in nature and do not resolve the possible risks arising from global imbalances and volatile capital flows.
The liquidity that central banks provide can be quite effective in alleviating the pain of the adjustment process, or temporarily stabilizing the situation in times of stress. The key is to use this temporary respite to initiate a positive cycle of fundamental reforms which will provide the foundation for strong, sustainable and balanced growth.