Document Type

Case Study

Case Series

Central Bank Swap Lines


Starting in 2009, China began to rapidly expand its network of central bank swap lines. In May 2011, the People’s Bank of China (PBOC) and the Bank of Mongolia (BOM) agreed to a bilateral reciprocal swap line to promote trade and economic development and to stabilize financial markets with short-term liquidity. The agreement stipulated caps of 5 billion renminbi (RMB; USD 0.8 billion) when the BOM was the borrowing party and 1 trillion Mongolian tugrik (MNT; USD 0.8 billion) when the PBOC was the borrowing party. By 2020, the PBOC had expanded the caps to RMB 15 billion and the BOM to MNT 6 trillion. The BOM drew on the swap line every year from 2012 to 2021, with a peak outstanding amount of USD 1.8 billion from 2016 to 2021. It sold the renminbi from the PBOC in foreign exchange auctions to support the tugrik and prevent a shortage of renminbi on the market. The central banks most recently renewed the swap line on July 31, 2020; we have not been able to confirm a specific expiration date, but the swap line was renewed for a three-year period.