Under the terms of the deal between the European Central Bank and the People’s Bank of China, the swap facility could total as much as 350 billion yuan and €45 billion.
The agreement is one of the largest currency deals between China and a non-Asian trading partner and will last for three years.
Europe and China trade roughly €480 billion in goods and services each year, and the European Union is China’s biggest export market.
In June, China struck a similar agreement with the Bank of England worth up to 200 billion yuan.
Global foreign exchange trading grew by 33% to $5.3 trillion over the three-year period (2010 to 2013). China’s 2.2% of currency transactions would be about $115 billion in annual volume. The UK and EU deals will nearly double that currency volume.
Tripling China RMB usage by 2015 would put the RMB as about the 6th most used currency. China seems likely to get to 4th most used by 2018-2020 even with a conservative plan of capital liberalization.
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