As part of its strategy to grab London yuan market share, Standard Chartered Bank (StanChart) is planning to offer preferential interest rates and waive clearing fees.
StanChart has partnered with Agricultural Bank of China (ABC) to launch renminbi-denominated clearing services in the UK.
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StanChart chief executive Peter Sands, said: "We think London is the place where the RMB will develop in the West, just given the depth of London’s capabilities.
"The missing part of the equation has been clearing services. As of yesterday we are offering clearing services. It’s a good example of a Chinese and a UK institution working together."
ABC president Zhang Yun said ABC will inject sufficient RMB liquidity into the London market.
"Together with Standard Chartered, we will support Chinese companies operating in the UK with a package of cross-border financial solutions. We will provide comprehensive trade, investment and financing services in London and promote the cross-border use of RMB ," Yun added.
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By GlobalDataAccording to data released by SWIFT, the Society for Worldwide Interbank Financial Telecommunication, the Chinese renminbi (CNY) has outstripped the euro to become the second most used currency in traditional trade finance.
The US dollar remains by far the most used currency for trade finance deals, accounting for 81.1% of SWIFT transactions.
