The Australian Securities Exchange (ASX) and the Bank of China have signed an agreement to co-operate on the development of the renminbi as a currency in Australia’s financial markets.
The Bank of China has been named as the official renminbi clearing bank in Australia by the People’s Bank of China, China’s central bank.
Such renminbi clearing banks have direct access to China’s onshore renminbi and foreign exchange markets.
ASX and the Bank of China launched a renminbi settlement service in Australia in July 2014, which allows Australian companies to pay and receive renminbi in the same way as they transact Australian dollars.
As well as increasing renminbi transaction volumes, ASX and the Bank of China hope to increase the issuance and trading of debt market products and derivative products denominated in renminbi. They will also seek to promote the ASX within China as a venue for raising equity capital.