China, EU sign 45 bn euro currency swap agreement

BEIJING: China and the European Union today signed a 350 billion yuan (45 billion euro) currency swap agreement, a major step in pushing international use of the Chinese currency yuan.

The deal, signed between the People's Bank of China and the European Central Bank (ECB), aims to support bilateral trade and protect financial stability, an official statement here said.

The agreement lasts three years and can be extended if both parties agree, it said.

The two central banks began to discuss the currency swap issue in early 2013.

PBOC governor Zhou Xiaochuan and ECB President Mario Draghi reached an agreement at the regular meeting of the Bank for International Settlements (BIS) in September.

"The new arrangement will provide more liquidity to the Renminbi market in the Euro area, promote the overseas use of the yuan, and help facilitate trade and investment," state-run news agency Xinhua quoted the statement as saying.

On October 1, China signed a 100 billion yuan currency swap agreement with Indonesia and it signed similar agreements with Hungary and Albania in September, furthering China's efforts to make its currency fully convertible.