China to set yuan clearing bank in Sydney: Australia

  • Economy
  • Thursday, 26 Jun 2014

SHANGHAI: China will designate a clearing bank in Sydney for overseas trading of its yuan currency, a top Australian official said on Thursday as Beijing seeks to make its tightly-controlled currency more international.

The Australian financial capital would follow London and Frankfurt as a location for a Chinese bank to clear transactions in yuan, also known as the renminbi.

"I am confident that we will have, before the end of the year, a designated clearing bank for renminbi trading in Australia with the opportunity for an Australian bank to be a market maker," Australia's Treasurer Joe Hockey told the Australian Chamber of Commerce in Shanghai.

Beijing announced this month that the Bank of China would be the clearing bank for yuan dealings in Frankfurt while China Construction Bank won the bid for London.

Chinese authorities keep a tight grip on the value of the yuan and limit capital flows into and out of the country.

But China – the world's second-largest economy – is gradually moving to implement financial reforms by making its exchange rate more flexible and opening its capital account for investment and financial transactions.

The yuan remained the seventh most used currency for global payments in May, transaction services organisation Swift (Society for Worldwide Interbank Financial Telecommunication) said on Thursday, although it accounted for only 1.47% of the total.

"China has come a very long way in relation to the renminbi," Hockey told journalists.

"In many ways they've moved faster to deregulate their currency than many other countries, and that hasn't been properly recognised by a lot of the critics. The best way to handle the Chinese in relation to the renminbi is to offer to be there to engage in facilitating more active trading, greater liquidity in various markets," he said.

Some major trading countries, notably the US, have criticised China's pace of reform as too slow and called for Beijing to let its currency float more freely.

Chinese President Xi Jinping is due to visit Australia in November for a summit of the G20 group of nations, and Hockey said the two countries hope to reach a free trade agreement before the end of the year. – AFP 

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

Fallout in Chinese market weighs on FBM KLCI
Global silicon wafer shipments hit another record high in 2Q
June exports surge past RM105b, boost from trade with China, US
IDC data: China's Q2 smartphone shipments down 11%
Ringgit opens mildly lower on mixed US economic signals
China state media seeks to calm investor nerves after stock rout
China bond bulls unfazed by crackdown on capital markets
Bursa lacklustre after overnight decline on Wall Street
Maybank IB lowers earnings projections on Globetronics
Kenanga maintains 'outperform' on Kossan

Stories You'll Enjoy