Newsletters
The Central Bank of the Republic of Türkiye (CBRT) and the People's Bank of China have renewed their bilateral currency swap agreement, allowing for the exchange of up to ₺189 billion (approximately $4.7 billion) or 35 billion Chinese yuan—a move aimed at deepening financial cooperation and supporting trade transactions in local currencies.
Turkish central bank stated that the agreement was signed by CBRT Governor Fatih Karahan and his Chinese counterpart, Pan Gongsheng.
Under the updated terms, the agreement allows for the exchange of these amounts based on the current exchange rate. The renewed agreement is valid for 3 years, with the option to extend it by mutual agreement of both parties.
The currency swap deal allows the two central banks to provide local currency liquidity to one another, thereby facilitating trade settlements and strengthening financial ties. According to the CBRT, the arrangement aims to encourage bilateral trade and financial cooperation by enabling swap-funded trade settlements.
Officials from both banks anticipate that the agreement will help broaden the scope of financial collaboration between the two institutions, and further stabilize trade flows between Türkiye and China.
Alongside the renewal of the swap agreement, the CBRT and the People's Bank of China signed a memorandum of understanding to establish renminbi clearing arrangements, which allow cross-border transactions to be settled directly in China's currency without converting to a third currency like the U.S. dollar.
This memorandum is intended to promote the use of China’s currency, the renminbi (also known as the yuan), in bilateral trade and investment, making financial operations smoother and more efficient.
China is the largest import partner of Türkiye, with total imports amounting to $4.17 billion in May, according to the Turkish Trade Ministry.
1 min read
1 min read
