The European Central Bank (ECB) and the People’s Bank of China (PBC) have agreed to extend their euro-renminbi currency swap arrangement for another three years, continuing until October 8, 2028. The terms of this agreement remain unchanged.
Initially established on October 8, 2013, the arrangement has a maximum size of CNY 350 billion and €45 billion. It was previously extended in 2016, 2019, and 2022 for additional three-year periods. This swap arrangement acts as a safeguard to address any sudden shortages in renminbi liquidity that euro area banks might face due to disruptions in the renminbi market.
“The arrangement serves as a backstop facility to address potential sudden and temporary CNY liquidity shortages for euro area banks,” said an ECB representative. Such arrangements are important for maintaining global financial stability. The agreement aligns with the significant trade and investment activities between the euro area and China.
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