The People’s Bank of China and the Bank of England have today announced that they have signed an agreement to renew the existing reciprocal sterling/renminbi (RMB) currency swap line for a further five years.

The maximum value of the swap line remains unchanged at RMB350bn.

Commenting, the Governor of the Bank of England said:

“The renminbi’s role in global trade and capital flows continues to increase. The renewal of this swap line for five years reflects a continued commitment by the Bank of England and the People’s Bank of China to support an effective and resilient renminbi market in the City of London, reflecting its role in Renminbi trading”.

The original reciprocal 3-year, sterling/renminbi currency swap line, for maximum value RMB 200bn, was signed in June 2013. The sterling/renminbi currency swap line was renewed in 2015, when the maximum value of the swap line was increased to RMB 350bn to reflect the continued growth of Renminbi trading in London, and 2018, when the maximum value remained at RMB 350bn.

Offshore RMB, widely denoted as CNH, refers to any RMB used outside mainland China which trades on a free-floating basis. Liquidity can move freely between a number of other centres, including Hong Kong, London, Singapore and Taiwan.