BEIJING: The central banks of China and Canada have agreed to a currency swap worth 200bn yuan ($33bn) or C$30bn, according to a Canadian government statement issued at a meeting of Asia Pacific nations yesterday.
The swap will be effective for three years, according to a separate statement from China’s central bank. The agreement was announced after Canadian Prime Minister Stephen Harper met Chinese Premier Li Keqiang. China’s central bank, the People’s Bank of China, will also appoint a clearing bank in Canada for yuan — or renminbi, as the currency is also called — as part of a Memorandum of Understanding, said the statement. It did not say which bank would be appointed as the clearing bank, but it is likely to be one of China’s four largest banks.
China’s central bank said in its statement that the yuan clearing bank would be in Toronto. The currency swap will help set up the clearing bank, and allow the two banks to swap currencies if needed to ease trade and investment. The yuan clearing bank would be the first in the Americas, and allow Canadian financial institutions to use the clearing bank to process payments for their customers in yuan. Reuters
