PBOC Extends Bilateral Currency Swap Arrangement with the Central Bank of Iceland
October 15, 2025
Pan Gongsheng, Governor of the People’s Bank of China (PBOC), met with Ásgeir Jónsson, Governor of the Central Bank of Iceland, on October 15, 2025, on the sidelines of the IMF/World Bank Annual Meetings. The two governors renewed the bilateral currency swap arrangement, which aims to further deepen monetary and financial cooperation between China and Iceland, facilitate bilateral trade and investment, and support financial market stability. The agreement is valid for five years, at a size of RMB 3.5 billion/Króna 70 billion.
Pan Gongsheng stated that China and Iceland have long maintained friendly and cooperative relations, and the renewal of the bilateral currency swap arrangement will serve as an opportunity to deepen bilateral financial cooperation.
A currency swap agreement is a financial arrangement between two countries’ central banks that allows them to exchange currencies and hold them for a set period. This mechanism promotes trade and investment by enabling settlements in local currencies rather than relying on a third-party currency, such as the U.S. dollar. It also helps ensure financial stability by maintaining liquidity during times of market stress.
Image: PBOC