Direct RMB-GBP trading sends RMB farther offshore: UOB

A London base adds sophistication to the currency.

RMB internalisation is well underway as PBoC announced on Wednesday the direct trading of RMB and GBP, along with the appointment of a subsidiary of China Construction Bank, China’s second largest lender, to undertake RMB clearing business in London.

The currency is expected to gain further traction due to guarantees of international trade denominated in RMB by UK’s trade finance body, UK Export Finance.

According to UOB, RMB payments and receipts will be made possible in the western time zone, improving efficiency and cost-effectiveness and making the currency even more attractive for importers and exporters.

Here’s more from the report:

The appointment of China Construction Bank as a clearing bank in London also shows that China is diversifying the ground in RMB internationalization, joining the ranks of Bank of China (in HK, Macau, Taiwan) and ICBC (in Singapore). Meanwhile, RMB internationalization is gaining further ground with a foothold for the first time in Western time zone. While the crossborder RMB pie is getting larger, this also means keener competition for existing centers, which would need to stay ahead of the pack in terms of connectivity, efficiency, and innovation as the pace of RMB internationalization accelerates.