RMB swap deal first step in Swiss hub plan

Author: Gemma Varriale | Published: 23 Jul 2014

The Swiss National Bank (SNB) and the People’s Bank of China (PBOC) have entered a currency swap line to boost trade and investment. While the deal signals Switzerland’s ambitions as an offshore renminbi (RMB) hub, the success of its plans now rest with China.

Signed on July 21, the swap agreement allows the Swiss and Chinese central banks to buy and sell their currencies, up to RMB 150 billion, or 21 billion Swiss francs ($23.4 billion).

The PBOC has also granted the SNB an investment quota of RMB 15 billion, or just over 2 billion Swiss francs, for the Chinese interbank bond market.

Switzerland is hoping the deal is the start of a process that...