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China’s central bank, BIS set up renminbi liquidity arrangement

CNA – China’s central bank said yesterday it signed an agreement with the Bank for International Settlements (BIS) to establish a Renminbi Liquidity Arrangement (RMBLA) that will provide support to participating central banks in times of market fluctuations.

The People’s Bank of China (PBOC) said the arrangement’s first participants, in addition to the PBOC, would include Bank Indonesia, the Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Central Bank of Chile.

Each participant will contribute a minimum of CNY15 billion (USD2.2 billion) or the US dollar equivalent, it said. The BIS said in a separate statement that the funds could be contributed either in yuan or US dollars, and that they would be placed with the BIS, creating a reserve pool.

Headquarters of the People’s Bank of China in Beijing. PHOTO: CNA