MNI BRIEF: Brazil And China To Sign BRL157BIn Swap Agreement

The Central Bank of Brazil (BCB) and the People's Bank of China (PBOC) will sign a BRL157 billion currency swap deal this Tuesday at an event in Beijing. 

"The main objective of the agreement is to provide liquidity to support the functioning of financial markets in times of need," the Brazilian central bank said in a statement.

The agreement has a five-year term. The BCB has similar arrangements with the Federal Reserve, known as the Foreign and International Monetary Authorities Repo Facility (FIMA), which allows the BCB to access U.S. dollars through a repurchase agreement backed by U.S. Treasury securities. This arrangement with the Fed became permanent in 2021.

"The PBOC currently has 40 similar currency swap agreements in place with other central banks. Countries that have signed such agreements with China include Canada, Chile, South Africa, Japan, and the United Kingdom, as well as the euro area through the European Central Bank," BCB added.