BIS establishes Renminbi Liquidity Arrangement with People’s Bank of China
27 June 2022 APAC
Image: AdobeStock/Eagle
The Bank for International Settlements (BIS) has established a liquidity arrangement with the People’s Bank of China to provide liquidity to central banks in the Asia-Pacific region.
This new Renminbi Liquidity Arrangement (RMBLA) will provide liquidity support through a reserve pooling scheme, whereby participating central banks will contribute a minimum of RMB 15 billion, or its USD equivalent, to a pool held with the BIS.
Participating central banks can draw funds from this pool during periods of market volatility and also gain access to additional funding through a collateralised liquidity window managed by the BIS up to an amount equivalent to the central bank’s share of this collateralised liquidity window.
The group of participating central banks will initially include Bank Indonesia, Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Central Bank of Chile, along with the People’s Bank of China.
In introducing this facility, as a bank for central banks, the BIS indicates that it is continuing its tradition of working with major reserve currency central banks to create liquidity support packages that may help central bank counterparts to negotiate market stress and to safeguard financial stability.
This new Renminbi Liquidity Arrangement (RMBLA) will provide liquidity support through a reserve pooling scheme, whereby participating central banks will contribute a minimum of RMB 15 billion, or its USD equivalent, to a pool held with the BIS.
Participating central banks can draw funds from this pool during periods of market volatility and also gain access to additional funding through a collateralised liquidity window managed by the BIS up to an amount equivalent to the central bank’s share of this collateralised liquidity window.
The group of participating central banks will initially include Bank Indonesia, Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore and the Central Bank of Chile, along with the People’s Bank of China.
In introducing this facility, as a bank for central banks, the BIS indicates that it is continuing its tradition of working with major reserve currency central banks to create liquidity support packages that may help central bank counterparts to negotiate market stress and to safeguard financial stability.
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