The China Construction Bank (CCB) is set to be named as the provider of clearing services for offshore renminbi trading in London, according to reports circulating in the markets today. A formal announcement is expected in one week when China’s leader, Li Keqiang, visits the UK.
As we reported in March 2014, the People’s Bank of China (PBOC) agreed a memorandum of understanding with the UK’s Bank of England setting out cooperation between the two central banks on renminbi clearing and settlement in London.
British Chancellor George Osborne said then that a clearing bank in London would complement the main clearing and settlement infrastructure in Hong Kong in assisting with the transfer of funds.
At almost exactly the same time, similar deals were inked between China and Germany, leading to jockeying between the two countries about whether Germany or Great Britain had been the first to receive the formal nod from China.
Hong Kong is the world’s largest centre for offhore renminbi deposits. Singapore has also been developing its infrastructure, and in September 2013, the Industrial and Commercial Bank of China was appointed to act as its renminbi clearer.