BEIJING, Dec 23 — The central banks of Thailand and China have agreed to renew their bilateral currency swap deal worth 70 billion Chinese Yuan or Bt370 billion.
The agreement was signed in Beijing on Monday by Prasarn Trairatvorakul, governor of the Bank of Thailand (BoT), and Hu Xiaolian, deputy governor of the People’s Bank of China (PBC).
The signing took place during the official visit to China by Thai Prime Minister Gen Prayut Chan-o-cha yesterday and today.
Mr Prasarn said the new swap agreement will replace the old deal which expired on yesterday. He said it will be effective for three years.
The arrangement provides each central bank access to local currency of the other contracted party.
It will boost confidence of the business and financial sectors of the two countries in using both the currencies in trade and investment settlements, he said.
Also, the Thai and Chinese banks signed an agreement to appoint a yuan clearing bank in Thailand.
Mr Prasarn said the yuan clearing bank will help cut cost of Thai commercial banks for settlement services in yuan and improve the efficiency of international trade between the two countries.
The BoT governor said China’s PBC will consider and appoint a commercial bank in Thailand as the yuan clearing bank.