ECB, Chinese bank to provide each other's currency
FRANKFURT, GERMANY (AP) - The European Central Bank and the People's Bank of China have agreed to start supplying each other with their currencies - a sign of increasing trade and investment between the eurozone and China.
The currency swap agreement will last for three years and provide a maximum of 350 billion yuan (S$71 billion) to the ECB and 45 billion euros (S$76 billion) to the PBC.
The deal means the ECB can reassure banks in the 17-member eurozone that they can always borrow Chinese currency if they need it.
The ECB said in a statement Thursday that the deal will also help to ensure the stability of financial markets.