China and Kazakhstan announce currency swap

Chinese president Hu Jintao announced on a trip to Kazakhstan Monday that the two countries had agreed to a US$1 billion currency swap, with an eye to facilitating cross-border trade and financial cooperation, the Financial Times reported. Hu said that cross-border trade is expected to rise to US$40 billion by 2015, almost twice the current figure. Almost all trade between the two countries is currently settled in US dollars, but the currency swap could lead to more settlement in local currencies. China’s influence in Kazakhstan has grown considerably over the past decade, thanks to significant investment in commodities such as oil, gas and metals. Kazakhstan – the world’s largest uranium producer – will also supply China with nuclear fuel pellets, beginning in 2012.