PBOC offers swap lines for global clout

Hong Kong

CALL it monetary diplomacy. When China's central bank renewed a US$2.2 billion credit facility with Mongolia earlier this year, the deal gave a lifeline to a struggling neighbour heading for an International Monetary Fund (IMF) bailout.

The arrangement is the latest facility to be agreed by the People's Bank of China (PBOC) among deals with more than 30 countries from Suriname to New Zealand, with a maximum combined value of 3.33 trillion yuan (S$676.8 billion). The credit lines - a kind of foreign-currency overdraft for central banks - are intended to spur trade and promote financial stability, according to the PBOC.