China's central bank said Tuesday that it is in talks to sign more currency-swap agreements to bolster international trade, after sealing six accords since November.
The People's Bank of China has set up 650 billion yuan (US$95 billion) worth of swaps to provide short-term liquidity, it said in a statement posted on its Website.
The central bank said the funding will promote bilateral trade and direct investment by allowing one country or region to pay for imports in another currency.
"Since the outbreak of the international financial crisis, China's central bank has been actively engaged in cooperation initiatives at the international and regional level, including the signing of a few bilateral currency swap agreements with neighboring countries and regions, which has boosted the confidence and capability of all parties concerned to handle the ongoing crisis," the central bank said.
It has signed currency swap deals, formal or framework, with central bank or monetary authorities from South Korea, Hong Kong, Malaysia, Belarus, Indonesia and Argentina.
Currency swaps originated in the 1970s. In recent years, central banks have used currency swaps to promote regional financial cooperation, implement monetary policy and maintain financial stability. Central banks use currency swaps to address short-term liquidity problems.
(Shanghai Daily April 1, 2009)
