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ECB, PBOC extend currency swap agreement by three years

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ECB, PBOC extend currency swap agreement by three years
FILE PHOTO: The headquarters of the European Central Bank (ECB) is illuminated with a giant euro sign in Frankfurt, Germany, March 12, 2016. REUTERS/Kai Pfaffenbach/File Photo   -   Copyright  Kai Pfaffenbach(Reuters)
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FRANKFURT (Reuters) – The European Central Bank has extended a bilateral, 45 billion euro ($50 billion)currency swap arrangement with the People’s Bank of China for another three years, the ECB said in a statement on Friday.

“From a Eurosystem perspective, the arrangement serves as a backstop facility to address potential sudden and temporary liquidity shortages in euro area banks due to disruptions in the renminbi market,” the ECB said.

The swap arrangement, which has a maximum size of 350 billion renminbi and 45 billion euros, was first established in 2013 and was later extended in 2016.

($1 = 0.8994 euros)

(Reporting by Balazs Koranyi; Editing by Jon Boyle)

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