The central banks of China and Indonesia have signed a third currency swap arrangement under the Chiang Mai Initiative, according to a joint statement issued on Tuesday.

 

The People's Bank of China and the Bank of Indonesia inked the agreement which says the Indonesian bank may obtain no more than US$4 billion, in case of inadequate liquidity, from the PBOC as a kind of currency swap cooperation.

 

The two sides signed their first swap arrangement in 2003 with up to US$1 billion allowed to be swapped. This was increased to US$2 billion in 2005.

 

The arrangement partly reflects the development of cooperation between the ten member countries of the Association of Southeast Nations (ASEAN) and China, Japan and South Korea, and is aimed at improving the financial stability and economic development in east Asia, the PBOC said.

 

(Xinhua News Agency October 18, 2006)