Turkey starts transactions with China under currency swap deal

According to media reports, Turkey conducted the first transaction with China in local currency on November 30, 2016, under the currency swap deal first signed in 2012 between the two countries.

Turkey’s first foreign transaction with local currency came right after efforts to rebalance the decreasing value of the Turkish lira against the US dollar by promoting the use of local currencies in foreign trade in order to reduce the costs of trading operations and the vulnerability of the foreign reserves.

Turkey and China had signed a 3-year currency swap deal worth 10-billion-yuan ($1.45 billion) first in 2012 to develop the financial relations, trade and investment between the two countries. The deal was later renewed on mutual consent so as to expand to 12 billion yuan ($1.74 billion) in 2015.

Recently, a similar currency swap deal was signed between Egypt and China to boost Cairo’s foreign reserves which have been under pressure for the last few years.