On 21 July 2014, the Swiss National Bank (SNB) and People’s Bank of China (PBoC) announced a reciprocal three-year, Swiss franc-renminbi (CHF-RMB) currency swap line with a maximum swap value of RMB150 billion (23.3 billion Swiss francs, or US$24.4 billion).
Currency swap lines allow central banks to purchase and repurchase currencies from one another within a fixed term and a capped amount.
The Chinese agenda
Since 2008, in the aftermath of the latest global financial crisis, China started negotiating swap lines with its trading partners.
The global financial crisis of 2007-2008 shook the Chinese export industry. Since the renminbi is not free ly convertible, most payments in and out of China were, and still are, made not in renminbi but mainly in US dollars. It is easy to calculate the loss that Chinese exporters suffered with each cent the US dollar depreciated during the financial crisis in 2007.
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