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Forex

China, Mongolia to extend currency swap agreement

Deal confirmed by foreign ministers

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Mongolian Foreign Minister Tsend Munkh-Orgil and China's Foreign Minister Wang Yi attend a joint news conference at Diaoyutai State Guesthouse in Beijing on Feb. 20.   © Reuters

BEIJING -- The foreign ministers of China and Mongolia confirmed at a meeting here Monday that the two countries will extend a currency swap agreement that had been set to expire in August.

Following the meeting with Mongolian Foreign Affairs Minister Tsendiyn Munkh-Orgil, Chinese Foreign Minister Wang Yi told reporters China seeks to extend the agreement "so Mongolia can overcome its difficulties." The extension applies to a 2014 swap line agreement worth 15 billion yuan ($2.18 billion). Because Mongolia can use the yuan in settlements with China -- its largest trading partner -- it can conserve foreign currency reserves.

The International Monetary Fund announced Sunday $5.5 billion in international support for Mongolia, which is facing an economic crisis. The package included a reference to China's willingness to extend the currency swap agreement.

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