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Currency swap with Hong Kong signed
By Zheng Lifei (China Daily)
Updated: 2009-01-21 08:01 The mainland on Tuesday inked a 200-billion-yuan currency swap deal with Hong Kong, the central bank said, in a move to promote financial stability and economic growth in the special administrative region. The deal, which will last for three years and can be extended upon the agreement of the two sides, "will enhance outsiders' confidence in and promote Hong Kong's financial stability", the People's Bank of China said. "It will also promote the development of the yuan-denominated trade between the two sides," it added.
"It will definitely bolster investors' confidence in Hong Kong as it will ensure financial stability and meet the city's cash flow needs," said Dong Xian'an, senior economist, Southwest Securities. "The swap deal is part of the concerted efforts with regional economies to weather the financial crisis," Dong said, citing a similar pact China and South Korea inked in December. A currency swap is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, give back the original amounts swapped. (For more biz stories, please visit Industries)
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