China, Britain set up currency swap line

Head of Bank of England Sir Mervyn met with PBOC's head Zhou Xiaochuan earlier this year in China.

China's central bank announced Sunday that it has signed an agreement to establish a currency swap line with the Bank of England (BOE) to boost bilateral trade and financial stability.

According to the People's Bank of China (PBOC), China's central bank,the maximum value of the reciprocal 3-year yuan/sterling currency swap will be 200 billion yuan (32.6 billion U.S. dollars)/20 billion pounds.

The currency swap line will facilitate yuan liquidity in London and overseas markets, as well as benefit bilateral trade and investment, the central bank said.

China's cabinet pledged in May to steadily introduce market-oriented interest rate and exchange rate system reforms, permitting individual investors to buy foreign equities and mapping out operational plans to make the yuan convertible under the capital account.

China has signed currency swap agreements with more than 20 countries and regions.