The Bank of Canada has lined up a $30 billion US currency swap with the U.S. Federal Reserve.

The Bank of Canada and other central banks have expanded their currency swap deals with the U.S. Federal Reserve to have U.S. dollars handy if they need to lubricate seized-up credit markets.

The move was spurred by "continued strains in short-term funding markets," the Canadian central bank said Monday in announcing the tripling of what is called a swap facility or reciprocal currency arrangement.

The Fed agreed to provide as much as $30 billion US, up from a $10 billion figure announced only 11 days earlier, although none of that cash has yet changed hands, a Bank of Canada statement said.

"This facility would be accessed, should the need arise, to provide U.S.-dollar liquidity in Canada. If drawn on by the Bank of Canada, the swap would provide liquidity facilities for use by financial institutions in Canada," it said.

In the background was the fact the U.S. dollar is the nearest thing to a world currency, especially for corporate transactions. A financial crisis that began with bad mortgage loans has choked off lending by many American banks.

Related moves were announced by the European Central Bank and the central banks of Japan, Britain, France, Norway, Sweden, Denmark, Switzerland and Australia. The ECB, for example, doubled its swap line with the Fed to $240 billion.

The Bank of Canada statement said the deal provides "additional flexibility to address rapidly evolving developments" in financial markets.

"The bank judges that it is not necessary for it to draw on this swap facility at this time, but that it is prudent to have the agreement in place. Should the swap be drawn on, the details of the liquidity facilities provided would depend on the specific market circumstances at the time."