Bank of England Close to Signing Yuan Currency Swap Deal

February 22, 2013 Share Print 0

The Bank of England is close to signing a deal with the People’s Bank of China that should help the City of London become a trading hub for the world’s fastest-growing currency, the yuan.

The UK central bank expects to sign a three-year currency swap arrangement “shortly”, which would allow it to supply yuan in exchange for other currencies if there were a sudden shortage in the London market.

The yuan is not fully convertible, meaning there are rules and regulations making the process of conversion more cumbersome. That can hinder trade as investors are nervous that there will not be enough yuan available if needed urgently for a deal.

via Guardian

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.