signs currency swap worth 150 billion yuan with Switzerland
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[July 21, 2014]
BEIJING (Reuters) - China signed
a bilateral currency swap agreement worth 150 billion yuan ($24.17
billion) with the Swiss central bank, which can invest up to 15
billion yuan in China's bond market.
The three-year swap, signed on Monday, will "provide liquidity
support for bilateral economic and trade exchanges and help maintain
financial stability," the People's Bank of China (PBOC) said in a
statement on its website, www.pbc.gov.cn.
The swap deal will provide liquidity support for development of the
offshore yuan market in Switzerland and will be extended if needed,
the PBOC said.
The Swiss National Bank (SNB) is allowed to invest up to 15 billion
yuan in China's interbank bond market under a quota given by the
PBOC. "The SNB's foreign exchange reserves can thereby be
diversified even further," the Swiss central bank said in a
In June, senior Swiss officials touted the SNB's qualifications to
be a hub of renminbi trading during a meeting with China's central
bank governor Zhou Xiaochuan.
Competition is fierce among Europe's major financial centers to
trade in China's currency. Frankfurt and Luxembourg are vying with
London, the favorite of many analysts, and Switzerland is trying to
muscle into the competition.
Analysts say London looks best placed to become Europe's main
offshore yuan center, given its role as the world's biggest
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In the past five years, China has promoted use of the yuan for trade
and investment, and also as a reserve currency to help lower
currency risks for Chinese companies and challenge the dollar's
global dominance over the long term.
($1 = 6.2063 Chinese yuan)
(Reporting by China economics team; Editing by Richard Borsuk)
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