London and Beijing agree currency swap

Bank of England Governor Mervyn King and his Chinese counterpart Zhou Xiaochuan agreed to a three-year currency swap line to promote financial stability and aid trade between China and Britain.

The maximum value of the arrangement is 200 billion yuan ($33 billion), according to a statement published by the UK central bank on its website in London. The People's Bank of China put the sterling value at 20 billion pounds ($31 billion) in a statement on its website.

"The establishment of a sterling/renminbi swap line will support UK domestic financial stability," King said in the news release. "In the unlikely event that a generalized shortage of offshore renminbi liquidity emerges, the bank will have the capability to facilitate renminbi liquidity to eligible institutions in the UK."