The UK government is continuing its efforts to
make London an offshore trading centre for the Chinese renminbi
(RMB).

A joint private-sector forum, “London-Hong
Kong Forum”, is to be launched to support the Chinese Government’s
policy in the development of the offshore RMB market 

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Facilitated by HM Treasury and the Hong Kong
Monetary Authority (HKMA), the new forum will initially
comprise representatives from financial institutions in both Hong
Kong and London, including HSBC, Standard Chartered, Bank of China,
Deutsche Bank and Barclays.

 

Increasing collaboration on RMB
services

PBI reported in September 2011 that the UK’s
Chancellor of the Exchequer, George Osborne, was in discussions
with Chinese leaders about growing RMB trading in London.

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This would give UK-based private banks and
wealth managers the ability to invest in the rapidly appreciating
Chinese currency on behalf of their clients, which has
traditionally been difficult without an Asian base.

The forum will focus on exploring
collaboration between the UK and Hong Kong, specifically looking at
clearing and settlement systems, market liquidity and the
development of new RMB denominated products.

 

HKMA to extend operating hours for
London

The HKMA said it will also significantly
extend the operating hours of its RMB payments systems to better
accommodate European transactions, making it easier for RMB
transactions in London to be settled. 

RMB deposits in Hong Kong have increased from
RMB64bn in January 2010 to RMB627bn in November 2011.

The volume of RMB denominated bonds have
increased from zero to $31.5bn in just four years, according to HM
Treasury.

HM Treasury said that the UK already handles
almost 30% of all RMB foreign exchange trading and is home to tens
of billions of RMB deposits.