Chinese premier Li Keqiang has concluded his three day visit to the UK. News announcements about British and Chinese currency ties have been timed to coincide with the state visit.
Among the Sino-British initiatives unveiled this week, this London Stock Exchange Group (LSEG) said it would develop clearing processes for yuan-denominated products with Bank of China, in order to make the UK. more attractive for the new offshore market in the currency.
The two companies signed a memorandum of understanding to increase each other’s access to the UK, European and Chinese financial markets. Currently 59 Chinese companies list their shares in London. Seven of these firms use the LSE’s main market.
We reported speculation last week that China Construction Bank would be awarded the mandate to become the IK’s first clearing bank for renminbi. That news was confirmed this week.
Alexa Lam, deputy CEO of Hong Kong’s Securities and Futures Commission, speaking at Thursday’s FT Asset Management conference that was held in Hong Kong, described the new ability to trade sterling against renminbi as, “a major, major milestone”.
The City of London Corporation’s annual survey of renminbi business volumes stated that total renminbi forex trading in London averaged US$25.3 billion a day in 2013, a 50% increase from 2012, the biggest rise having taken place in spot trading.