Australia’s central bank extends swap deal with China counterpart

October 26, 2021

SYDNEY (Reuters) – Australia’s central bank extended a currency swap agreement with its Chinese counterpart earlier this year even as mounting trade tensions deadlocked talks between the countries’ governments.

The Reserve Bank of Australia (RBA) extended the deal with the People’s Bank of China back in July, though the first official mention of it came in the RBA’s annual report released last week. The previous deal expired in April.

The PBOC mentioned the agreement in a document posted on its website in September

The five-year agreement allows for the exchange of local currencies between the two central banks of up to A$41 billion ($30.60 billion) or CNY 200 billion.

The RBA has similar deals with Japan and Korea, allowing the central banks to support trade settlement in local currencies in times of market stress or financial instability.

Trade talks between Beijing and Canberra have been stalled for months as an acrimonious trade dispute led China to slap tariffs on Australian wine and all but ban some types of coal imports.

($1 = 1.3398 Australian dollars)

(Reporting by Wayne Cole; Editing by Shri Navaratnam)

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