London, Taiwan and Singapore grow as Rmb offshore hubs
Accounting for 46% of renminbi foreign exchange transactions and 30% of payments sent and received outside of Hong Kong and China in 2011, London is gaining strength as an offshore hub for the currency. May 08, 2012 | Baron LaudermilkThe slight decline in renminbi deposits in Hong Kong has not affected the influx of renminbi in other renminbi offshore centers. Taipei, Singapore, and London are all becoming hubs for Rmb deposits and financial instruments. Although Hong Kong is currently the only officially designated offshore Renminbi trading center, but the government is keen on expanding the currency’s use in international transactions and rely less on the dollar and euro. In January, the British chancellor of the exchequer George Osborn said that Britain and Hong Kong had agreed to launch a joint private sector forum to enhance cooperation between the two states and support China’s efforts to develop the offshore market for the renminbi. Osborne told a meeting of Asian finance ministers and officials that he is taking steps to establish London as a new offshore hub. London plans to allow private banks and wealth managers to invest in the renminbi on behalf of their clients without needing a base in Asia. Surveys and studies from the British Treasury have indicated that British banks and financial service institutions increasingly want to trade in the Renminbi, seeing this as a rapidly growing market in bond issuance and foreign exchange. Figure 1. Foreign exchange market share as of 2011
In fact, in the fourth quarter of 2011, London accounted for 46% of Renminbi foreign exchange transactions completed outside of Hong Kong and China. Furthermore, London accounted for 30% of Renminbi payments sent and received outside of Hong Kong and China, according to SWIFT. Although many influential banks, including HSBC and Standard Chartered, predict that London could be one of the largest offshore centers by 2020, there is still a long way to go before that happens. Treasury officials and English banks are now in the process of studying Chinese... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Hong Kong, Rmb, Singapore, Taiwan, Trade Finance, Transaction BankingHK,Rmb,Singapore,Taiwan,Trade Finance,Transaction Banking, Hong Kong,Rmb,Singapore,Taiwan,Trade Finance,Transaction Banking, Keywords:London, International Transactions, Foreign Exchange Transactions, Economic Cooperation Framework Agreement, Currency Trade Swaps London, International Transactions, Foreign Exchange Transactions, Economic Cooperation Framework Agreement, Currency Trade Swaps
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