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Tue, 18 Nov, 2014 12:00:38 AM FTimes- Xinhua Report, Nov. 18
China and Australia signed a deal here Monday to launch an RMB clearing service in Sydney, in another push for use of the Chinese currency in international business.
According to the memorandum of understanding inked by the two countries' central banks, the People's Bank of China and the Reserve Bank of Australia, China will set up a clearing bank in Sydney to handle transactions denominated in RMB, also known as Chinese yuan.
Under the agreement, China will grant Australian banking institutions a 50-billion-yuan (8.2 billion U.S. dollars) quota under the RMB Qualified Foreign Institutional Investors (RQFII) program.
Also, China has agreed to increase to 10 billion yuan (1.6 billion dollars) the maximal amount the Reserve Bank of Australia is allowed to invest in China's interbank bond market.
Launched in 2011, the RQFII program allows foreign investors to invest in Chinese onshore stock and bond markets with offshore RMB.
So far this year, the world's second largest economy has reached agreements with Germany, Britain, France, Luxembourg and South Korea to open local RMB trading hubs, as the Chinese currency has gained increasing popularity in global trade and investment.
China is now Australia's largest trading partner, export market and source of imports. Two-way trade reached 136.4 billion dollars in 2013, a year-on-year rise of 11.5 percent.
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