Chilean central bank strikes deal with China to expand currency swap to $7.1 bln

SANTIAGO, July 24 (Reuters) – Chile’s central bank said on Friday it had reached a deal with China to expand an existing currency swap line to 50 billion yuan ($7.1 billion) to stabilize markets and ease the South American nation´s ailing economy through the ongoing coronavirus pandemic.

China, Chile´s top trade partner, had previously agreed to a 22 billion yuan ($3 billion) swap. Besides more than doubling the amount available to Chile, the Chinese central bank also agreed to expand the ways in which the swap line could be used.

“In addition to…facilitating Chile’s foreign trade operations with China, these resources may also be used to contribute to the stability of financial markets,” the Central Bank said in a statement.

The bank said the deal with China would shelter Chile´s economy from shocks on international financial markets.

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