China-Australia Currency Swap Pact Renewed for Fourth Time, Expands to $32.7 Billion
China and Australia have renewed their bilateral local currency swap agreement for the fourth time. The pact has been expanded to $32.7 billion, a significant increase from its previous size of $26.8 billion. The China-Australia currency swap agreement was signed in 2012 and has since been renewed three times. This latest renewal is valid for five years and can be extended by mutual consent.
The arrangement aims to deepen monetary and financial cooperation between the two countries, facilitate bilateral trade and investment, and maintain financial-market stability. The People's Bank of China (PBC) and the Reserve Bank of Australia have approved the extension, which has been increased from 200 billion yuan/A$41 billion to 220 billion yuan/A$46 billion.
Professor Hu Qimu at the Maritime Silk Road Institute of Huaqiao University notes that this agreement can facilitate bilateral trade by allowing companies to settle transactions directly in yuan or Australian dollars. This move is particularly significant given China's status as Australia's largest importer, with imports totaling $130.25 billion last year.