The People’s Bank of China (PBoC) has named Bank of China Ltd. (BOC, 03988.HK, 601988.CN) as the clearing bank for renminbi transactions in Paris, marking the latest step in expanding the offshore yuan market, according to a central bank statement Monday.
BOC, one of the country’s top-four state-owned banks, had earlier been also designated as the clearing bank in Frankfurt, the first in euro area. It also acts as the renminbi clearing bank in Hong Kong, Macau and Taiwan.
On June 18, the PBoC appointed China Construction Bank Corp. (00939.HK, 601939.CN), another state-owned lender, as the clearing bank for yuan-related transactions in London. It was the first yuan clearing bank in a European country.
Opening a clearing bank is a critical step in developing offshore yuan-based business. The designated banks will be able to supply yuan liquidity in case of a shortage by directly accessing China’s onshore currency market.
China’s central bank said on June 29 that it planned to designate clearing banks for its currency in Paris and Luxembourg, as the two financial centers battle with London to become the leading European offshore yuan-trading city.
On July 4, the PBoC authorized Bank of Communications Co. Ltd. (03328.HK, 601328.CN) to provide renminbi clearing service in Seoul.
Last year, Industrial and Commercial Bank of China Ltd. (01398.HK, 601398.CN) was appointed as the clearing bank in Singapore.
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