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Australia’s central bank extends swap deal with China counterpart -Breaking

by Mike Robinson

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© Reuters. FILEPHOTO: A pair of women walks next to Sydney’s Reserve Bank of Australia headquarters, Australia. February 6, 2018. REUTERS/Daniel Munoz

SYDNEY (Reuters – Australia’s central banks extended a currency swap deal with China earlier in the year despite growing trade tensions between the two countries.

Although the People’s Bank of China was first mentioned in RBA’s last week’s annual report, the Reserve Bank of Australia (RBA) has extended the agreement with them. The last deal was terminated in April.

In September, the PBOC posted a document on its website mentioning this agreement.

The five-year agreement allows for the exchange of local currencies between the two central banks of up to A$41 billion ($30.60 billion) or CNY 200 billion.

Similar deals were made by the RBA with Japan and Korea. This allows central banks to facilitate trade settlements in local currencies during times of financial stress or market stress.

Talks between Beijing- Canberra on trade have been stopped for many months due to an ugly dispute in the market. China placed tariffs on Australian wine, and even banned certain types of coal imports.

($1 = 1.3398 Australian dollars)

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