Japan, China extend currency swap arrangement for 3 years

TOKYO: Japan and China extended a currency swap arrangement, signed in 2018, for three years to October 2024, the Bank of Japan said on Monday, as part of efforts to ensure financial system stability.

The arrangement will allow the exchange of local currencies between the two central banks for up to 200 billion yuan or 3.4 trillion yen ($30 billion), the BOJ said.

"By utilising the swap agreement, the Bank of Japan would be prepared to provide liquidity in Renminbi in the event that Japanese financial institutions face unexpected difficulties in Renminbi settlements, and the bank judges the liquidity provision to be necessary for ensuring the stability of Japan's financial system," the BOJ said in a statement.

In October 2008, the two countries signed a currency swap arrangement to strengthen financial stability and spur bilateral business relations. The arrangement was set to expire Oct. 25.