OREANDA-NEWS. November 13, 2013. Approved by the State Council, the PBC and the ECB signed a bilateral local currency swap arrangement, for the purpose of supporting bilateral economic and trade activities and ensuring the stability of financial markets.

The swap line has a maximum size of 350 billion yuan or 45 billion euro. The agreement will be valid for three years and can be extended by mutual consent.

Since the beginning of 2013, the PBC and the ECB have conducted several rounds of positive and effective consultations on how to establish the bilateral currency swap arrangement. At the BIS regular meeting held in September 2013, Governor Zhou Xiaochuan and President Mario Draghi reached a consensus on relevant arrangements. After completing approval procedures by both parties, the final agreement was inked.

The establishment of a bilateral local currency swap arrangement will provide liquidity support for the further development of RMB market in the euro area, promote the use of RMB outside China, and facilitate bilateral trade and investment. The signature of the agreement marks the new progress in the areas of monetary cooperation between the PBC and the ECB.