Japan, China extend currency swap arrangement for 3 years-BOJ

© Reuters. FILE PHOTO: A Japanese 1,000 yen banknote and Chinese 100 yuan banknotes are seen in this picture illustration in Beijing, China, January 21, 2016. REUTERS/Jason Lee/File Photo

TOKYO (Reuters) – Japan and China extended a currency swap arrangement, signed in 2018, for another three years to allow the exchange of local currencies between the two central banks of up to 200 billion yuan, or 3.4 trillion yen ($386 trillion), the Bank of Japan said on Monday.

“By utilizing 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.

($1 = 0.0088 yen)