ECB and People’s Bank of China extended their bilateral currency swap

The European Central Bank (ECB) and the People´s Bank of China (PBC) have agreed to extend their bilateral currency swap for another three years. The banks made the announcement last week.

According to the release, the swap has a maximum size of 350 billion Chinese renminbi and 45 billion euros. These can be used as backstop liquidity facility if there is potential shortage of the Chinese renminbi in the euro area.

– The ECB and the PBC established the first three-year bilateral currency swap arrangement on 8 October 2013 with a maximum size of 350 billion in Chinese renminbi and €45 billion, which was subsequently extended in 2016 for another three-year period. The arrangement with the PBC reflects rapidly growing bilateral trade and investment between the euro area and China, the release says.

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Hong Kong to make rival offer of London Stock Exchange – FT (updated)

The Hong Kong Stock Exchange is making a rival offer of London Stock Exchange, LSE. According to Financial Times, the deal would be worth of 32 billion pounds.

According to the Hong Kong Exchanges & Clearing Ltd CEO Charles Li they considered the offer for months. He says that the combination would be rationale for many reasons and one of them is the assets trading in euros, dollars and renminbi.

– First, LSEG is one of the most well-known, highly respected and successful exchange groups in the world. Based in London, it is a global offshore centre for Eurodollars. Likewise, HKEX is one of the top Asian exchange groups based in Hong Kong, the world’s leading offshore market for Renminbi. A combination of two markets of this size and significance has never been done before and would create a globally-connected exchange group that serves as the leading international platform for financial assets denominated in US dollars, Euro and Renminbi, the CEO Li says in his blog today.

The HKEX has offered 20,45 pounds a share in cash and 2,495 new HKEX shares, which would make a 23 % premium to LSE´s closing price yesterday, the Financial Times says. The shares of LSE are trading up about 8 % to 7368 pounds in London.

 

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