China, ECB ink currency swap deal
BEIJING/FRANKFURT: China accelerated plans to internationalise its currency yesterday by agreeing to swap euros and yuan with the European Central Bank (ECB) in a deal that is set to be China's second-largest to date.
The bilateral currency swap agreement between the ECB and the People's Bank of China (PBOC) is valid for three years and has a maximum size of 350 billion yuan, or ?45 billion (RM194.25 billion).
The deal is the latest of a string of currency swaps that China has created with other nations to promote usage of the yuan in global commercial and financial transactions, with the ultimate goal of rivalling the dollar as a reserve currency.
"The emphasis is on renminbi internationalisation," said Louis Kuijs, an RBS economist in Hong Kong.
The swap deal with the ECB is China's second-biggest with a foreign central bank, after South Korea's 360 billion yuan swap line.
China also has a 400 billion yuan swap agreement with Hong Kong. Reuters