UK, China to sign historic currency clearing deal

British Chancellor of the Exchequer George Osborne said the announcement is a major step forward for London to increase renminbi activity and is a result of hard work by the UK's public sector to drive forward this agenda.

"I've put much government effort over the last three years into making sure we're the leading Western center for trading in the Chinese currency, the renminbi. That effort has paid off," Osborne said.

Osborne said London's renminbi transaction growth will lead to growth in jobs and investment in the future.

"Of course, other Western countries will follow, but London now has the critical mass of infrastructure, helping to put Britain at the front of the global race," he said.

Mark Boleat, policy chairman for the City of London Corp, also welcomed the initiative, adding that it will help to reinforce confidence in London for renminbi activities.

"It should encourage more UK firms to use the renminbi as a currency for international trade," he said.

Britain's Prime Minister David Cameron and China's President Xi Jinping had discussed cooperation between the two countries over appointing a clearing and settlement bank during a meeting on the margins of a nuclear security summit in the Netherlands on Tuesday, Wednesday's statement said.

Statistics released by the City of London in January showed that trade finance transactions using renminbi in London totaled 27.94 billion yuan ($4.61 billion) in the first half of 2013, up from 13.8 billion yuan a year earlier.

Meanwhile, daily average trading volume of renminbi-related foreign exchange products in London expanded to $22.3 billion, up from $11.6 billion.

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Clearing facility to support London's renminbi business