South African Reserve Bank (SARB) today said it has signed a three-year bilateral swap agreement with the People’s Bank of China (PBoC) for the exchange of $4.75 billion in local currencies.

“The purpose of the agreement is to support trade and investment between South Africa and China, and also to act as a mitigating resource for short term balance of payment pressures,” a statement by SARB said.

The two central banks, according to SARB, entered into the deal due to the rapidly growing bilateral trade and investment, not only between South Africa and China, but also China and the rest of the African continent.
SARB says that the agreement further strengthens its relationship with PBoC which dates back to 2013 when a deal was agreed to allow South Africa’s central bank to invest in China’s onshore bond market.