ECB, Chinese bank to provide each other's currency

Oct 10, 2013, 5:16 AM EDT

FRANKFURT, Germany (AP) — The European Central Bank and the People's Bank of China have agreed to start supplying each other with their currencies — a sign of increasing trade and investment between the eurozone and China.

The currency swap agreement will last for three years and provide a maximum of 350 billion yuan ($56 billion) to the ECB and 45 billion euros ($60.8 billion) to the PBC.

The deal means the ECB can reassure banks in the 17-member eurozone that they can always borrow Chinese currency if they need it.

The ECB said in a statement Thursday that the deal will also help to ensure the stability of financial markets.