RBNZ renews currency swap facility with PBOC (why, what for? ... etc.)
An announcement from the Reserve Bank of New Zealand :
- The People's Bank of China (PBOC) and the Reserve Bank of New Zealand today announced the renewal of a reciprocal currency arrangement (swap line) to support the settlement of cross border transactions between New Zealand and Chinese businesses
- The arrangement, first agreed in 2011, aims to promote bilateral trade and direct investment for economic development between the two countries
- The size of the swap facility is RMB 25 billion (NZD 5 billion) and it has a three year maturity which may be extended if both parties agree
- Reserve Bank Deputy Governor Grant Spencer said the bilateral currency swap line helps facilitate international use of the renminbi, and contributes to a strengthening of the China-New Zealand relationship.
Nah, not gonna move the rates.
Currency swaps have other uses if you want to read up on them: