European, Chinese central banks extend currency swap agreement

By Gokhan Ergocun

ISTANBUL (AA) - The euro-renminbi currency swap agreement between the European Central Bank (ECB) and the People’s Bank of China (PBoC) was extended for another three years.

The agreement, which was signed in 2013 with an upper limit of 350 billion renminbi and €45 billion ($43.6 billion), was extended in 2016 and 2019 previously, a press release on Monday from the ECB showed.

"From a Eurosystem perspective, the arrangement serves as a backstop facility to address potential sudden and temporary CNY liquidity shortages for euro area banks as a result of disruptions in the renminbi market," the ECB said.

"Liquidity-providing arrangements contribute to global financial stability. The arrangement with the PBC is consistent with the large volumes of bilateral trade and investment between the euro area and China," the ECB added.