Baku, Azerbaijan, July 27
By Rufiz Hafizoglu – Trend:
Turkey’s Central Bank, starting from July 27, will be able to take part in operations of the onshore foreign exchange market of China, the Turkish media outlets reported.
The exchange rate in this market is controlled by the People’s Bank of China, and currency trading is conducted in line with this exchange rate within the country.
Starting from 2015, China, as part of liberalization of the country’s foreign exchange market, allowed foreign banks to participate in currency trading.
The first currency swap between the People’s Bank of China and the Central Bank of Turkey was held in November 2016. The agreement on currency swap transactions was signed between the parties in 2012.
The agreement costs three billion Turkish liras (10 billion Chinese yuan). The agreement is aimed at facilitating trade and investing in local currency between the countries.
A foreign currency swap is an agreement to make a currency exchange between two foreign parties. The agreement consists of swapping principal and interest payments on a loan made in one currency for principal and interest payments of a loan of equal value in another currency.
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