The main purposes of the swap agreement are to support trade and investment between Australia and China, particularly in local-currency terms, and to strengthen bilateral financial cooperation, the RBA said in a statement on its website. The agreement reflects the increasing opportunities available to settle trade between the two countries in Chinese renminbi and to make RMB-denominated investments.
China has been expanding currency-swap accords as it promotes the international use of the yuan, and the accord with Australia follows similar deals with nations including South Korea, Turkey and Kazakhstan. China is Australias biggest trading partner and accounts for about a quarter of the nations merchandise sales abroad.
The three-year agreement extends the integration of China into the global financial markets, said Andrew Salter, a strategist at Australia & New Zealand Banking Group in Sydney. It represents continued internationalisation of yuan.
Australias total trade with China last year jumped to a record A$114 billion, a 17% gain from a year earlier, according to government figures. Australian exports advanced 23% to A$71.9 billion, and imports totaled A$42.1 billion.