Britain, China OK currency swap

AFP-JIJI

The Bank of England and the People’s Bank of China have signed an agreement to establish a reciprocal, three-year sterling-yuan currency swap line, Britain’s central bank announced.

The deal was agreed Saturday between BOE Gov. Mervyn King, who steps down at the end of this month, and his counterpart, Zhou Xiaochuan, of the central People’s Bank of China.

“The maximum value of the swap is 200 billion (yuan) renminbi ($32.6 billion),” the BOE said in a statement. “The swap line may be used to promote bilateral trade between the two countries and to support domestic financial stability should market conditions warrant.”

Zhou and King met in February in Beijing for discussions on the swap line.