Governor of the People's Bank of China Zhou Xiaochuan (L) shakes hands with Chairman of the National Bank of Tajikistan Jamshed Nurmahmadzoda. The two sides signed a 3.2-billion-yuan currency swap agreement in Dushanbe, Tajikistan, September 3, 2015. [Photo: Xinhua]

China and Tajikistan have launched a currency swap deal in Urumqi, capital of Xinjiang Uygur Autonomous Region.

Tajikistan becomes the second Central Asian country to have a currency swap deal with China, after Kazakhstan.

President of the Urumqi Branch of People's Bank of China, Guo Jianwei, believes the deal can benefit people and business in both countries.

"The swap deal allows residents of the two countries to trade directly with each sovereign currency instead of using a third currency. It also confirms the objective trend that the RMB has become an internationally convertible currency since joining the special drawing rights basket."

In September, the central banks of China and Tajikistan signed the currency swap agreement.

Under the agreement, the two sides can exchange payments in one currency for equivalent amounts in another to facilitate bilateral trade settlements and provide liquidity support to financial markets.

Manager of Tajikistan Agriculture Investment Bank, Ali, says the deal is helpful for Tajikistan.

"This measure is timely and necessary for enterprises and people in Tajikistan. Because under the current situation, the exchange rates are changing every day, making the market fluctuate, while the yuan is really strong around the world."

The latest deal, worth 3 billion yuan, or 470 million U.S. dollars, will last for three years or more.

In addition, the agreement is expected to further boost trade and investment and safeguard regional financial stability.