Türkiye's central bank announced on Friday that it had renewed its bilateral currency swap agreement with the People's Bank of China, updating the terms to reflect current exchange rates between the Turkish lira and the Chinese yuan.
The agreement was signed by the Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan and People's Bank of China Governor Pan Gongsheng, said an official statement.
The revised agreement allows for a maximum notional value of TL 189 billion or 35 billion Chinese yuan ($4.79 billion) in local currency swaps between the two institutions, the statement said.
The agreement, first signed in 2019 and expanded in 2021, will remain valid for three years and may be extended upon mutual agreement, the CBRT said.
Currency swap lines are used by central banks to facilitate bilateral trade, enhance financial cooperation and provide liquidity support in local currencies.
The update aligns with efforts by both countries to promote non-dollar-denominated trade and reduce exposure to external currency volatility.
The CBRT said the arrangement is designed to promote bilateral trade through a swap-financed trade settlement facility and financial cooperation between the two countries.
"The two sides expect that this arrangement will further strengthen collaboration between the two central banks," it noted.
In a separate statement, the Turkish central bank also announced that it had signed a memorandum of understanding on establishing a yuan clearing arrangement, which would help facilitate bilateral trade and investment.
The MoU was also signed by Karahan and Pan, the statement said.
