What Is a Cross-Currency Swap?

Currency swaps (also known as currency swaps) refer to the exchange of two debt funds with the same amount, the same maturity, and the same interest rate calculation method, but also with different interest amounts.

Currency swap agreement

simply put,

Can reduce financing costs

Satisfy the wishes of both parties

Avoid

Using currency swaps involves three steps:

The first step is to identify existing cash flows.

(1)

The general practice of currency swap quotation is: when the principal is exchanged at the beginning of the period, the spot exchange rate is usually used, and when the principal is exchanged at the end of the period, the forward exchange rate is used.

The first swap contract appeared in the early 1980s, and since then, the swap market has grown rapidly. Famous this time

In December 2008, the central bank and South Korea signed a currency swap agreement of 26 billion U.S. dollars (approximately 180 billion yuan / 38 trillion won at the then exchange rate).

On January 20, 2009, the central bank and the Hong Kong Monetary Authority signed a 200 billion yuan currency swap agreement.

On February 8, 2009, the Central Bank and the National Bank of Malaysia signed a bilateral currency swap agreement with a scale of 80 billion yuan / 40 billion ringgit. The implementation of the agreement is valid for three years and can be extended upon mutual agreement.

On March 11, 2009, the Central Bank and the National Bank of the Republic of Belarus announced the signing of a bilateral currency swap agreement with a scale of 20 billion yuan / 8 trillion Belarusian rubles. The implementation of the agreement is valid for 3 years and can be extended with mutual agreement.

On March 23, 2009, the Central Bank and the Bank of Indonesia announced the signing of a bilateral currency swap agreement in Beijing, with a scale of 100 billion yuan / 175 trillion Indonesian rupees. The implementation of the agreement is valid for three years and can be extended upon mutual agreement.

On March 29, 2009, the Central Bank and the Central Bank of Argentina signed a 70 billion yuan equivalent RMB currency swap framework agreement in Amadel.

On June 9, 2010, the central bank and Iceland signed a currency swap agreement valued at more than $ 500 million (about 3.5 billion yuan at the exchange rate at the time).

On July 24, 2010, the Central Bank and the Monetary Authority of Singapore signed a bilateral domestic currency swap agreement in Beijing with a swap size of 150 billion yuan / about 30 billion singapore dollars. The implementation of the agreement is valid for three years and can be extended upon mutual agreement.

On April 19, 2011, the Central Bank and the Reserve Bank of New Zealand signed a bilateral domestic currency swap agreement in Beijing amounting to 25 billion yuan. The agreement is valid for 3 years and can be extended upon mutual agreement.

On April 19, 2011, the central bank and Uzbekistan signed a RMB 700 million currency swap agreement. The agreement is valid for 3 years and can be extended upon mutual agreement.

On May 6, 2011, the Central Bank and the Central Bank of Mongolia signed a bilateral currency swap agreement in Ulaanbaatar, the capital of Mongolia. The swap agreement amounted to RMB 5 billion. The agreement was valid for 3 years and could be renewed upon mutual agreement.

On June 13, 2011, the Central Bank and the National Bank of the Republic of Kazakhstan signed a bilateral domestic currency swap agreement with an amount of RMB 7 billion in Astana, the capital of Kazakhstan. The agreement is valid for 3 years and can be extended upon mutual agreement.

On October 26, 2011, the People's Bank of China and the Bank of Korea (Central Bank) renewed the bilateral domestic currency swap agreement between China and South Korea in Seoul. The scale of the swap was expanded from the original 180 billion yuan / 38 trillion won to 360 billion yuan / 64 trillion won, valid for three years, can be extended upon mutual agreement. The original bilateral exchange agreement between China and South Korea signed on April 20, 2009 will become invalid from the date of this renewal. The Bank of Korea stated on January 27, 2013 that the bank used the currency swap arrangement signed with China for trade settlement for the first time, and loaned 62 million yuan to the Korean foreign exchange bank. Korean companies paying by Chinese trading partners. ^[1]

On November 22, 2011, the People's Bank of China and the Hong Kong Monetary Authority renewed the currency swap agreement in Beijing. The swap scale was expanded from the original 200 billion yuan / 27 billion Hong Kong dollars to 400 billion yuan / 490 billion Hong Kong dollars. It can be renewed with the consent of both parties. The original currency swap agreement signed on January 20, 2009 will expire on the date of renewal.

On December 22, 2011, the People's Bank of China and the Bank of Thailand signed a bilateral currency swap agreement between China and Thailand in Bangkok. The swap scale is 70 billion yuan / 320 billion baht, which is valid for three years and can be extended with the agreement of both parties.

On December 23, 2011, the People's Bank of China and the National Bank of Pakistan signed a bilateral currency swap agreement between China and Pakistan in Islamabad. The swap scale is 10 billion yuan / 140 billion rupees, which is valid for three years and can be extended upon mutual agreement.

On January 17, 2012, the People's Bank of China and the UAE Central Bank signed a bilateral domestic currency swap agreement in Dubai. The swap scale is 35 billion yuan / 20 billion dirhams (approximately US $ 5.54 billion), which is valid for three years and can be renewed upon mutual agreement.

On February 8, 2012, the People's Bank of China and the National Bank of Malaysia renewed the bilateral domestic currency swap agreement between China and Malaysia, and the swap scale expanded from the original 80 billion yuan / 40 billion ringgit to 180 billion yuan / 90 billion forest. Jitter is valid for three years and can be renewed upon mutual agreement. The original bilateral currency swap agreement signed on February 8, 2009 will expire on the date of renewal. Both parties believe that the renewal of the bilateral domestic currency swap agreement will help maintain regional financial stability and facilitate bilateral trade and investment. ^[2]

On February 21, 2012, the People's Bank of China and the Central Bank of Turkey signed a bilateral domestic currency swap agreement between China and Turkey in Ankara. The swap scale is 10 billion yuan / 3 billion Turkish lira, and is valid for three years. ^[3]

On March 20, 2012, the People's Bank of China and the Bank of Mongolia signed a supplementary agreement on bilateral currency swaps between China and Mongolia in Beijing. / 2 trillion Tugrit. The two sides believe that the signing of a bilateral bilateral currency swap supplementary agreement will help maintain regional financial stability and facilitate bilateral trade and investment. ^[4]

On March 22, 2012, the People's Bank of China and the Reserve Bank of Australia signed a bilateral currency swap agreement between China and Australia in Beijing. The swap scale is RMB 200 billion / Australia 30 billion, which is valid for three years and can be extended upon mutual agreement. ^[5]

On June 26, 2012, the People's Bank of China and the National Bank of Ukraine signed a bilateral currency exchange agreement between China and Ukraine in Beijing. The swap scale is 15 billion yuan / 19 billion hryvnia, which is valid for three years, and can be extended upon mutual agreement. ^[6]

On March 26, 2013, Brazil and China signed a $ 30 billion currency swap agreement, which is expected to provide guarantees for growing trade between the two countries. ^[7]

On June 22, 2013, the People's Bank of China announced that it had signed a 200 billion yuan / 20 billion pounds bilateral currency swap agreement with the Bank of England with a term of three years. The UK also became the first G7 central bank to sign a currency swap agreement with China.

On October 9, 2013, the People's Bank of China and the European Central Bank signed a Sino-European bilateral currency swap agreement with a scale of 350 billion yuan / 45 billion euros. ^[8]

On April 25, 2014, the People's Bank of China and the Central Bank of New Zealand renewed a Sino-Singapore bilateral currency swap agreement with a scale of RMB 25 billion / NZ $ 5 billion. ^[9]

On July 18, 2014, the People's Bank of China and the Central Bank of Argentina renewed a bilateral domestic currency swap agreement with a scale of 70 billion yuan / 90 billion Argentine pesos. ^[9]

On July 21, 2014, the People's Bank of China and the Swiss National Bank signed a bilateral domestic currency swap agreement with a scale of 150 billion yuan / 21 billion Swiss francs. The move aims to provide liquidity support for bilateral economic and trade exchanges and maintain financial market stability. The swap agreement is valid for three years and can be renewed upon mutual agreement. ^[10]

On August 21, 2014, the People's Bank of China and the Central Bank of Mongolia renewed a bilateral currency exchange agreement between China and Mongolia with a scale of RMB 15 billion / 4.5 trillion Mongolian Tugrik. ^[9]

On September 16, 2014, the People's Bank of China and the Central Bank of Sri Lanka signed a bilateral currency swap agreement between China and Sri Lanka with a scale of 10 billion yuan / 22.5 billion Sri Lankan rupees. ^[9]

On October 11, 2014, the People's Bank of China and the Korean Central Bank renewed a bilateral domestic currency swap agreement with a size of 360 billion yuan / 64 trillion won. ^[9]

On October 13, 2014, the central bank's website announced that the People's Bank of China and the Central Bank of the Russian Federation signed a bilateral domestic currency swap agreement with a scale of 150 billion yuan / 815 billion rubles. The announcement said that the move aims to facilitate bilateral trade and direct investment and promote the economic development of the two countries. The swap agreement is valid for three years and can be renewed upon mutual agreement. ^[11]

On November 3, 2014, the People's Bank of China and the Central Bank of Qatar signed a bilateral domestic currency swap agreement with a size of 35 billion yuan / rials 20.8 billion. The validity period of the bilateral currency swap agreement between China and the Czech Republic is three years, and can be extended upon mutual agreement. ^[12]

On November 8, 2014, with the approval of the State Council of China, the People's Bank of China and the Central Bank of Canada signed a bilateral domestic currency swap agreement with a size of 200 billion yuan / 30 billion Canadian dollars. The swap agreement is valid for three years and can be renewed upon mutual agreement. ^[13]

On November 27, 2014, the People's Bank of China and the Hong Kong Monetary Authority announced that they had renewed a three-year currency swap agreement. The scale of the agreement is 400 billion yuan, which is the same as the previous agreement, equivalent to 505 billion Hong Kong dollars. The Mainland and Hong Kong signed a currency swap agreement with a scale of up to 400 billion yuan in 2008. It was renewed for the first time in 2011 and renewed this year. ^[14]

On December 22, 2014, the People's Bank of China and the Bank of Thailand (Bank of Thailand) renewed their bilateral currency swap agreement. The scale of bilateral domestic currency swaps is 70 billion yuan / 370 billion baht. The agreement is valid for three years and can be extended upon mutual agreement. ^[15]