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9/27/2016, 11:28 AM (Source: TeleTrader)
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ECB, PBoC extend currency swap deal

The bilateral currency swap agreement established in 2013 by the European Central Bank and the People's Bank of China was renewed on Tuesday for another three years. The central monetary authority of the Eurozone said the conditions and parameters were kept unchanged. The original three-year deal was designed for a maximum of 350 billion yuan and €45 billion.

"From a Eurosystem perspective, the arrangement serves as a backstop facility to address potential sudden and temporary disruptions in the renminbi market due to liquidity shortages in euro area banks. Liquidity providing arrangements contribute to global financial stability," ECB said and underscored the deal mirrors improvement in trade and investment volumes between the euro area and the world's most populated country. According to the announcement, PBoC and its euro area counterpart tested the system on two occasions last year.

The euro was steady against most of its major counterparts during mid-trade at European stock markets. The joint currency of 19 nations inched 0.11% and 0.12% against the franc and the Canadian dollar, respectively, at 11:27 a.m. CET, while at the same time it added just 0.1% compared to the pound.

 

Baha Breaking News (BBN) / IT