China and the UK established a currency swap line during the weekend which will allow the Bank of England to counteract a shortage of renminbi liquidity in trading houses in London, Financial Times reported. China has signed similar deals with more than 20 key trading partners but this was the first with a Group of Seven country. The arrangement will last three years and has a maximum value of US$36.2 billion. Mervyn King, the governor of the central bank, said the move would “support UK domestic financial stability.”
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