China’s central bank establishes a renminbi liquidity agreement
On June 25th, China’s central bank announced that it had signed an agreement with the Bank for International Settlements to establish a Renminbi Liquidity Arrangement (RMBLA) that will provide support to participating central banks during market fluctuations.
The People’s Bank of China (PBOC) announced that, in addition to the PBOC, the first participants in the arrangement would be Bank Indonesia, the Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore, and the Central Bank of Chile.
It was stated that each participant will contribute a minimum of 15 billion yuan (US$2.2 billion) or the equivalent in US dollars. The BIS stated in a separate statement that the funds could be contributed in either yuan or US dollars and would be invested.