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France considers to set up currency swap line with China

France is considering establishment of a currency swap line with China, with a strategy to transform Paris into an offshore Yuan trading hub in Europe.

Bank of France Governor Christian Noyer was quoted by China Daily as saying, "The Bank of France has been working on ways to develop a RMB liquidity safety net in the euro area with due consideration of a supporting currency swap agreement with the People’s Bank of China."

A French data underlined that Yuan deposits in Paris amount to nearly RMB10bn ($1.6bn) after London and nearly 10% of Sino-French trade are completed using RMB.

Further development on a RMB liquidity safety net in the euro area is likely to be considered during a visit by French President Francois Hollande to China in late April, which will also include discussion on internationalization of RMB as well as bilateral financial cooperation.

The planned swap line would be one step ahead in Chinese strategy for global acceptance of RMB as well attracting more investment in the country.

Last year, British central bank had inked a three-year swap line agreement with China and introduced an offshore yuan currency and bond market.