China, Singapore Sign Currency Swap Pact

(Beijing) – Singapore has become the latest addition to the list of countries to sign currency swap agreements with China. China's central bank and Monetary Authority of Singapore recently signed a three-year swap agreement valued at 150 billion yuan.

The eighth of its kind since December 2008, the swap agreement aims to facilitate trade and direct investment between the two Asian nations. The agreement can be extended upon the mutual agreement of the two sides, according to a statement on the People's Bank of China's website.

China had signed 653.5 billion yuan worth of swap agreements with South Korea, Hong Kong, Malaysia, Belarus, Indonesia, Argentina and Iceland.

Singapore, one of China's major trading partners, witnessed a 37 percent year-on-year increase in trade with China in the first half of this year. The trade with Singapore accounted for two percent of China's total foreign trade in the first six months of 2010.

In July 2009, China launched a trial program of cross-border trade settlement in the yuan, linking Shanghai and four Guangdong Province cities to Hong Kong, Macau, and the Association of Southeast Asian Nations. After nearly one year of trial, the scope of the yuan settlement was expanded to 20 provinces, autonomous regions municipalities and all of China's trading partners. 
 
The currency swap agreement will give Singaporean companies access to the supply of yuan bill notes, facilitating cross-border yuan trade transactions.