HONG KONG Standard Chartered Bank (2888.HK) said on Monday it will cooperate with Agricultural Bank of China (1288.HK) to provide yuan clearing services in the UK, helping financial institutions and corporates execute yuan transactions.
With Agricultural Bank of China's extensive distribution network and abundant yuan funds in China's onshore market, the cooperation will inject sufficient yuan liquidity into the market in London.
The availability of yuan clearing services in the UK will also pave the way for greater awareness and development of yuan products and services beyond Hong Kong.
"London's position as a leading international financial centre is enhanced by the ability to offer onshore clearing services that allow on-demand access to settle RMB denominated services within the London time zone," Peter Sands, Group CEO of Standard Chartered (STAN.L), said in a statement.
"The opportunity to boost RMB liquidity in London could be used to fund large investment projects and support the development of other financial activities," Sands said.
The announcement was made as British Prime Minister David Cameron began a trip to China.
As the world's largest FX centre, London's yuan business is developing rapidly.
Across all deliverable FX products, London banks conducted 41 percent of offshore yuan trading in the city. In spot trading, their business transacted in London was nearly 59 percent, City of London said in a report released in June.
The London Metal Exchange aims to introduce yuan-based contracts denominated and settled in the Chinese currency via its Hong Kong platform, LME Chief Executive Garry Jones told an industry conference in November.
China is stepping up efforts to promote its currency to global investors, with the aim of lifting the international clout of the yuan and finally making it on par with the U.S. dollar.
(Reporting by Michelle Chen; Editing by Kim Coghill)