UK, China signs MoU on RMB clearing, settlement in London

The Bank of England and the People's Bank of China Monday simultaneously announced that a Memorandum of Understanding (MoU) between the two countries' central banks regarding renminbi (RMB) clearing and settlement arrangements in London has been signed.

The agreement will facilitate the use of RMB by banks and other firms in international transaction, supporting global trade and investment, said British central bank on its website.

The People's Bank of China confirmed the agreement on its website. It said the central bank will announce the clearing bank of the RMB business afterward. The establishment of the RMB clearing in London will benefit the RMB cross-boarder transaction of both countries' enterprises and financial institutes, thus further promoting the mutual trading, investment liberalization and facilitation.

Jon Cunliffe, Deputy Governor of the Bank of England, said that the MoE signed by two central banks represents a key mile stone on the journey of greater internationalization of the RMB.

Mark Boleat, Policy Chairman for the City of London Corporation, commented that the agreement will help to reinforce confidence in London and underlines the close partnership between the British and Chinese authorities. It should encourage more British firms to use the RMB as a currency for international trade.

The MoU was signed on Monday in London by Cunliffe and Hu Xiaolian, Deputy Governor of the People's Bank of China, noted the Bank of England.