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China, EU sign $57bn currency swap agreement
October 10, 2013, 9:18 am

[Getty Images]

The currency agreement will be valid for three years [Getty Images]

China’s central bank, the People’s Bank of China (PBC) on Thursday signed a three-year currency swap agreement worth 350 billion yuan ($57 billion) with the European Central Bank (ECB).

“The swap arrangement has been established in the context of rapidly growing bilateral trade and investment between the euro area and China, as well as the need to ensure the stability of financial markets,” said a statement from the ECB.

The currency agreement will be available to all eurozone countries through their national central banks.

It will be valid for three years and will allow the ECB to access up to 350 billion yuan and the PBC to access up to 45 billion euros.

The ECB said from the eurosystem’s perspective it will serve as a backstop liquidity facility.

Trade between Europe and China has doubled since 2003 and is worth more than $1.3 billion a day.

The European Commission is set to negotiate on an “investment agreement” with China at a meeting in Luxembourg later this month.

This could pave the way for a Free Trade Agreement between the two biggest markets in the world.

The BRICS Post

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