The PBOC has just signed a deal with the BRICS nations on a $100bn Contingent Reserve Arrangement. After finalising the deal they said it was in the best interests of China and the world to help other emerging economies. They also said that it’s is hard for China to be the exception if there is huge volatility in global financial markets.
China’s reach now goes further with this deal. It’s effectively an emergency swap agreement program like the Fed, BOJ, BOE and ECB have agreed for their respective currencies.
The breakdown is as follows;
- China – USD 41 billion
- Brazil – USD 18 billion
- Russia – USD 18 billion
- India – USD 18 billion
- South Africa – USD 5 billion
It will be interesting to hear if Russia ever needs to access the swap lines if sanctions bite deeply.
