USD-RMB: 7.0490
 

London Leads Global Peers in Offshore Yuan Trading

2019-08-12 14:38:11.0

London is the world leader while now accounting for nearly half of all offshore RMB foreign exchange trading, thanks to the currency's increasing internationalization, a report published on Thursday said.

The fourth London RMB Business Quarterly produced by the City of London Corp in partnership with the People's Bank of China, the country's central bank, showed that in the first quarter of 2019, the average daily trading volume of the Chinese currency in London was more than 78 billion pounds ($94.6 billion), up 30 percent year-on-year.

The UK capital now accounts for 44.46 percent of total global RMB foreign exchange transactions.

"The PBOC will continue optimizing policies on RMB cross-border use, improving the infrastructure for the global use of RMB, meeting the reasonable demands of market entities and pushing the global use of RMB to a new level," Jin Mei, chief representative of the PBOC in Europe, said.

The report said cross-border receipts and payments between China and the UK saw massive growth, hitting more than 55 billion yuan ($7.8 billion), up 86 percent on February 2019 and more than 100 percent on the same month in 2018.

"In line with the Belt and Road Initiative, the usage of RMB in countries and regions along the Belt and Road has been steadily expanded. The aim of our latest report is to focus on the RMB cross-border usage along the Belt and Road economies, which could be the catalyst for RMB internationalization in the future," Jin said.

Investor appetite for so-called Dim Sum bonds remains large, with two more added to the London Stock Exchange in May 2019, meaning 101 Dim Sum bonds are now listed on the bourse with an outstanding value of 27.63 billion yuan.

Dim Sum bond refers to a yuan-denominated debt instrument issued by foreign investors.

"This report shows yet again that London continues to dominate the RMB offshore market," said Catherine McGuinness, policy chair at the City of London Corp.

"More importantly, it reveals that the fundamentals of London remain strong in the face of uncertainty, particularly in terms of foreign exchange," she said. "Few will deny that the Chinese currency is set to become a more important player on the world stage, particularly through the lens of the Belt and Road Initiative."

McGuinness added: "As London is the FX (foreign exchange) capital of the world, it's obvious that the RMB should be traded and cleared here." (Source: China Daily)


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