HONG KONG, March 1 (Reuters) - Bank of China and futures exchange operator CME Group have signed an agreement to expand the use of the Chinese currency in settling some commodities trades, further expanding the use of the yuan outside the country’s borders.
The two sides also agreed to enhance cooperation on yuan clearing, custody, and futures settlement, the bank said in a statement posted on its website.
Trade settled in yuan, also known as the renminbi, has surged from almost nothing to about 240 billion yuan ($38.13 billion) since China began landmark reforms to denominate more of its trade in its own currency in June 2009.
CME, which operates the Chicago Mercantile Exchange, the Chicago Board of Trade, and the New York Mercantile Exchange, gets the bulk of its revenue from trading fees and sales of market data and has started making a push to Asia, specifically China, to increase its presence.
In December, CME said it would start accepting the Chinese currency traded in the offshore market as collateral on all its exchange-traded futures products.
China’s move to liberalise the offshore yuan market has picked up since its launch in June 2010.
At the end of January, total yuan deposits in Hong Kong banks swelled to 576 billion yuan, representing more than 9 percent of all deposits in Hong Kong banks, compared with less than 1 percent in January 2010. ($1 = 6.2936 Chinese yuan) (Reporting by Kelvin Soh; Editing by Jacqueline Wong)