LONDON, June 17 (Reuters) - The London Stock Exchange said on Tuesday it had signed agreements with two of China’s biggest banks to develop offshore trading in the Chinese currency Britain.
A partnership with Bank of China <601988in .SS> will see the two companies design clearing and financing processes for products such as bonds and exchange-traded funds denominated in renminbi, otherwise known as the yuan, the LSE said in a statement.
Bank of China will also work towards becoming a member of the London Stock Exchange, it added.
Under a separate deal with the Agricultural Bank of China , the LSE will work with the lender to help facilitate access to capital for Chinese companies through the exchange’s primary markets.
China has relaxed controls over the last five years to establish the yuan as an international currency of trade and reduce its reliance on other currencies. The yuan is expected to become a leading so-called reserve currency, meaning it will be stockpiled by central banks, and be fully convertible into other currencies by 2015.
Eyeing a big boost for its financial sector, London wants to become a major offshore centre for renminbi trading but faces stiff competition from Luxembourg, Frankfurt and Paris, which all have similar ambitions.
The deal between the LSE and Bank of China coincides with a visit by Chinese Premier Li Keqiang to Britain to strengthen business ties between the two nations.
More than $30 billion worth of deals are expected to be signed during the three-day visit, which began on Monday. Britain has also pledged to overhaul its visa system to make it easier for Chinese tourists and businesses to visit the country. (Reporting by Clare Hutchison)