The People's Bank of China (PBOC) and the Reserve Bank of New Zealand (RBNZ) on Friday announced the renewal of a reciprocal currency arrangement to support the settlement of cross-border transactions between Chinese and New Zealand businesses.

The size of the swap facility is 25 billion yuan (3.6 billion US dollars) and it has a three-year maturity which may be extended if both parties agree, PBOC announced.

The arrangement, first agreed in 2011, aims to promote bilateral trade and direct investment for economic development between the two countries, according to PBOC.

The currency swap deal allows the two institutions to exchange payments in one currency for equivalent amounts in the other, which will facilitate bilateral trade settlements and provide liquidity support to financial markets.

RBNZ Deputy Governor Grant Spencer said the bilateral currency swap line helps facilitate the international use of the RMB and contributes to the strengthening of the China-New Zealand relationship.

(Source: Xinhua)