Segment 1: Groundhog Day in Washington SEGMENT BEGINS AT 00:37 Many Americans may not realize that the current debt ceiling debate is not about future expenditures but about already-promised current obligations. The wheel goes round and round and round and yet it...
(FTMDaily.com) – The Bank of England has just announced it has signed a three year currency swap arrangement with China worth 200 billion Yuan ($33 billion).
As the world’s currency trading capital, London has long been courting China in an attempt to gain a foothold in the expanding global use of the Chinese currency, the Yuan. The plans for the U.K.-China currency swap were first revealed last February by Bank of England Governor, Mervyn King.
According to a statement recently released upon the finalization of the new deal, King said: “In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the Bank will have the capability to facilitate renminbi (Yuan) liquidity to eligible institutions in the UK.”
So far, China has already agreed to currency swap lines with more than 15 other countries around the globe.
Earlier this year, it was announced that China had created similar currency deals with Pakistan and Australia
Consider these news headlines demonstrating the aggressive nature of China’s monetary hopes:
China, Russia to dump US dollar for bilateral trade
China-Japan Currency Deal Points Way to New Monetary Order
China, Singapore Double Currency Swap Agreement to $48 Billion
China and Brazil sign $30bn currency swap agreement
France plans currency swap line with China
China and Australia in currency pact
South Korea to use currency swap with China for trade settlement
China announces currency swap with Pakistan
China, Hong Kong Expand Currency-Swap Pact to $63 Billion
Why is this important?
What makes this currency swap arrangement with the United Kingdom so important?
It is the first currency deal that China has been able to secure with a G-7 country. In essence, the Yuan has entered the big leagues. China continues to grow its global monetary influence at a breathtaking pace. It is almost as if the People’s Bank of China is making preparations to replace the U.S. Dollar as the global reserve currency.