More policies to support cross-border use of renminbi

China is likely to issue more supportive measures to encourage cross-border use of the yuan amid growing global demand for the currency, said an industry insider.

Such measures include a larger quota for renminbi qualified foreign institutional investors, fewer restrictions under the capital account, and more freedom for global yuan investments by individuals, said Cheng Jun, general manager of the Corporate Banking Unit of Bank of China.

"We are still not sure of the timetable and details of such policies, but we think this will be the next step taken by the central bank," said Cheng.

Cheng's estimates were based on the strong growth momentum of international use of the yuan.

In 2012, cross-border settlement in yuan rose 41.4 percent year-on-year, to 2.94 trillion yuan ($472 billion) according to the People's Bank of China, the central bank.

"Demand for the Chinese currency is robust," Cheng said, adding that BOC's RMB business will continue to focus on the Asia-Pacific region.

In December, BOC was authorized by the PBOC as the clearing bank for RMB business in Taiwan.

In less than a month since the business started on Feb 6, BOC Taipei has set up clearing accounts for 53 banks, and completed 5.6 billion yuan in clearing transactions.

"As cross-Straits economic ties further strengthen, and more Taiwan investors set up factories in the mainland, we expect RMB business in Taiwan to see rapid growth in 2013," Cheng said.

This confidence was shared in London, which aims to build itself into an offshore RMB center. "We have seen a strong growth in RMB trade-related services provided by London banks," said Mark Boleat, chairman of the policy and resources committee of the City of London.

Trade services grew to 2.2 billion yuan, a 390 percent increase compared to the six-month average for 2011, and the volume in letters of credit grew 20 times to 3.7 billion yuan.