Governor of Mongol Bank N.Zoljargal and Governor of the People’s Bank of China Zhou Xiaochuan signed a new agreement to expand bilateral currency swap facilities from 10 billion CNY to 15 billion CNY, on August 21.
The new agreement will take immediate effect and will be effective for three years. Establishment of the new agreement annuls the previous 10 billion CNY bilateral currency swap agreement established on May 6, 2011, and extended on May 14, 2014.
The expansion of the currency swap agreement between Mongol Bank and the People’s Bank of China is crucial in helping to provide liquidity and for maintaining the stability of the financial market when necessary. The new agreement aims to stimulate trade and investment between the two nations.
China has been Mongolia’s largest trading partner and investor for the past 10 years, with bilateral trade volume reaching 5.4 billion USD in 2013, and the CNY is the second-most used currency for cross border payments between China and Mongolia.
According to the Society for Worldwide Interbank Financial Telecommunication, CNY ranked as the seventh most active currency for global payments and accounted for 1.55 percent of payments worldwide. It overtook the Euro to become the second-most used currency in global trade finance after the U.S. dollar last year.
SOURCE: Ub Post