China, Singapore sign 150-billion yuan currency swap deal
24 Jul 2010
The Chinese central bank People's Bank of China (PBC) and its Singaporean counterpart Monitory Authority of Singapore (MAS) announced yesterday that they have signed a currency swap agreement, aiming to promote bilateral trade and direct economic development of the two countries.
The currency swap arrangement is valued at 150 billion yuan ($22 billion) or S$30 billion and has a maturity of three years, which could be further extended if both parties agree, according to a statement on the PBC website.
The announcement was made at the 7th Joint Council for Bilateral Cooperation (JCBC) meeting between China and Singapore held in Beijing and the document was signed in the presence of Chinese vice premier Wang Qishan and deputy prime minister of Singapore Wong Kan Seng.
''The bilateral currency swap arrangement is a key pillar of co-operation between the PBC and the MAS to strengthen regional economic resilience and financial stability,'' MAS said in a release.
A currency swap is an agreement between two parties to exchange the principal amount and applicable interest in one currency with principal and interest on another currency over a negotiated maturity period. This instrument is normally used to hedge interest-rate risks.
Over the past two years, China has signed currency swap agreements worth more than $650 billion yuan with several countries including Republic of Korea, Malaysia, Indonesia, Belarus, Argentina, Hong Kong, Iceland, etc.
