China, ECB extend currency swap agreement

The European Central Bank and the People’s Bank of China have agreed to extend a currency-swap arrangement put in place three years ago as part of a string of moves aimed at encouraging global use of the renminbi. The Chinese and eurozone central banks will extend the arrangement for another three years, the ECB said on Tuesday, maintaining a maximum size of 350 billion yuan and 45 billion euro. According to The Wall Street Journal, while the swap line is a backstop facility that won’t be used most of the time, it is a symbol of the growing trade between two of the world’s largest economic powers. The deal is “a recognition of the rapidly growing bilateral trade and investment between the euro area and China,” the ECB said.