Currency Swap between China and Europe and Trader in Residence – TiR

October 13, 2013

By: Steven Wu

Currency Swap between China and Europe

China and Europe are set to continue increasing their bilateral investments strongly despite a global economic slowdown, and the newly-established free trade zone in Shanghai will actively promote investment liberalization

China-Europe economic cooperation is increasingly diversified as Europe, which is already China’s largest trade partner, is becoming an important destination for Chinese enterprises seeking overseas expansion. Therefore, China has accelerated plans to internationalize its currency by agreeing to swap euros and yuan with the European Central Bank. The swap agreement with the ECB is China’s second-biggest with a foreign central bank, after South Korea’s 360 billion yuan swap line.

The bilateral currency swap agreement between the ECB and the People’s Bank of China is valid for three years and has a maximum size of 350 billion yuan (US$60.8 billion). The deal is the latest of a string of currency swaps that China has made with other nations to promote the yuan’s use in global commercial and financial transactions. And the currency swaps also provide central banks with additional liquidity in times of financial emergencies, though this function is of secondary purpose in China’s swap agreements

As China’s largest trade partner, Europe is an ideal place for Beijing in raising the yuan’s profile. The interest is reciprocated by some European nations. Germany and British has already wanted to be the clearing center for the yuan in Europe and provide what may be a lucrative financial service.

The emphasis is on yuan internationalization. Yuan is now the world’s eighth most-traded currency, financial services provider SWIFT said, with a market share overtaking the Swedish krona, the South Korean won and the Russian rouble.

China’s swap deal with the ECB comes after French President said in June that France is working on setting up a currency swap line with the world’s second largest economy. Banks in the eurozone and France will therefore have the security they need to develop their activities in yuan over the long term.

Trader in Residence – TiR

The DeGroote Trading Centers will be hosting Trader in Residence, a speaker series being industry professionals in DeGroote to discuss their success in their field of business. The series takes places every Tuesday at 5:30PM in the Ron Joyce Center, RJC, in room 136 and is also viewable via a 2 way camera in the Gould Trading Floor located at 122A in the DeGroote School of Business, DSB.

Drinks and food will be provided at the DSB location.

For further information regarding the series please visit:

The list of upcoming speakers is as follows:

October 15- Torstein Braaten-Chief Executive Officer, Chief Compliance Officer and Managing Director of TriAct Canada Marketplace LP
October 22- Darren Farwell- Senior Wealth Advisor | Director, Wealth Management | ScotiaMcLeod Head Office Branch
October 29- To Be Announced
November 5- Paul Allison-Chairman, Chief Executive Officer, and President -Raymond James Ltd.
November 12- To Be Announced
November 19- To Be Announced

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