In a statement released yesterday, the RBA said the agreement, which will continue for three years, follows the initial swap agreement which was signed in 2012.
The RBA explained the new agreement would allow for the exchange of local currencies between the two central banks of up to $40 billion or CNY200 billion.
“As with the initial agreement in 2012, the main purposes of this agreement are to support trade and investment between Australia and China, particularly in local-currency terms, and to strengthen bilateral financial cooperation,” the statement said.
“The agreement reflects the increasing opportunities available to settle trade between the two countries in Chinese renminbi (RMB) and to make RMB-denominated investments,” it said.
The RBA also added that other initiatives currently between Australia and China include the establishment of an official RMB clearing bank and the granting of a quota as part of the RMB Qualified Foreign Institutional Investor program in November 2014.
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