The People’s Bank of China (PBOC) has signed a memorandum of understanding with the French central bank to set up a renminbi clearing and settlement system in Paris.
Additionally, the People’s Bank of China has also signed a MoU the central bank of Luxembourg to set up a renminbi clearing bank in Luxembourg, Grand Duchy.
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The yuan payment system has been designed to facilitate and promote cross-border renminbi transactions as well as trade and investment.
The French central bank said that the payment system, which was signed between Zhou Xiaochuan, governor of the PBoC and Christian Noyer, governor of the Banque de France, will function on the basis of a clearing bank that will be designated by the PBoC.
The agreements with PBOC will allow greater cooperation in the oversight of their domestic yuan market and will expand Chinese currency’s footprint in the offshore renminbi market.
The MoU between the PBoC, Banque centrale du Luxembourg (BCL) and Banque de France will establish cooperation in terms of oversight, exchange of information and assessment and improvement pertaining to the renminbi business in Luxembourg.
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By GlobalDataZhou Xiaochuan, governor of the PBoC, and Gaston Reinesch, governor of the BCL, who signed the MoU in Switzerland, said: "The BCL will monitor the renminbi market in Luxembourg and share relevant data with the PBoC."
THe French central bank said the move will facilitate the safe and efficient settlement in renminbi in an open system covering transactions in the eurozone or the neighboring regions.
