ICBC to clear RMB business in Luxembourg

The Luxembourg branch of China's largest lender, ICBC, has been appointed as a clearing bank for renminbi business in the European country, the Chinese central bank said on Tuesday.

The People's Bank of China (PBOC) made the decision in accordance with a memorandum of understanding (MOU) signed with Luxembourg's central bank, Banque centrale du Luxembourg (BCL), the PBOC said in an online statement.

Luxembourg is joining European cities including London, Frankfurt and Paris to capitalize on the rapid growth of offshore yuan-denominated trade and financial products.

Earlier, the PBOC appointed Bank of China as a clearing bank for renminbi business in both Frankfurt and Paris, while China Construction Bank was authorized to be the renminbi clearing bank in London.

The PBOC inked two MOUs on renminbi business with BCL in June this year.

They aim to establish cooperation in terms of oversight, exchange of information and assessment pertaining to renminbi business in Luxembourg in view of a forthcoming designation by the PBOC of a renminbi clearing bank in the country, the PBOC said.

Global payments in the Chinese currency renminbi, or yuan, have continued to expand since China launched yuan settlement for cross-border trade in 2009. The Chinese currency accounted for 1.62 percent of global payments by March, ranking seventh worldwide.

According to the PBOC, cross-border trade via renminbi had a total value of 3.27 trillion yuan (531.7 billion US dollars) in the first half of 2014, up 1.22 trillion yuan year on year.