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  • Jul 23, 2014
  • Updated: 8:15am
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CURRENCIES

Swiss seek offshore yuan trading role

PUBLISHED : Monday, 08 July, 2013, 12:00am
UPDATED : Monday, 08 July, 2013, 3:09am

Switzerland wants to become an offshore yuan trading centre in Europe, competing with Frankfurt and London to corner trade in China's currency.

The country's economy minister, Johann Schneider-Ammann, said in Beijing on Saturday after signing a free-trade agreement with Commerce Minister Gao Hucheng: "The Swiss side, the Swiss financial system, in particular the Swiss National Bank, we are interested in getting the chance to negotiate with the Chinese about a renminbi hub in the centre of Europe, in Switzerland."

While no official talks have taken place, Schneider-Ammann said he hoped the idea would become "more serious" in the coming weeks or months.

London, the centre of the world's US$4 trillion-a-day market for foreign exchange trading, claims to have the edge in Europe after the Bank of England signed a three-year currency swap line with the People's Bank of China last month.

A group representing Frankfurt's financial industry predicted last week that the European Central Bank would get a swap deal that would allow it to exchange euros for as much as 800 billion yuan (HK$1.01 trillion) - four times the size of the Bank of England agreement.

To have a trading hub, a central bank must have an agreement with the PBOC to swap its currency for yuan.

This gives a central bank access to yuan funds to back up firms doing business with Chinese partners.

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