NewSydney moves ahead with yuan trading, with People's Bank of China backing
Central bank governor Zhou Xiaochuan shows support for Sydney's yuan trading hub bid as currency deregulation drive picks up speed
People's Bank of China governor Zhou Xiaochuan is personally backing efforts to develop a yuan trading centre in Australia, Treasurer Joe Hockey told the South China Morning Post on Tuesday.
"Obviously if we can have a relationship on RMB trading like London or some other jurisdictions, that helps, but the trend is heading in the right direction. Governor Zhou has given me a personal assurance that if there is more that can be done to facilitate the growth, we'll work together to make it happen," he said, without elaborating.
Hockey made the comments after attending the signing ceremony for the newly established US$50 billion Asian Infrastructure Investment Bank (AIIB) in Beijing on Monday. Australia was the first foreign nation to sign up as a founding member of the China-led multilateral bank.
"China has come a very long way in a very short period of time in deregulating its currency and the West has not given China enough credit for how quickly it moved for such a massive economy," Hockey said.
Sydney is among the major cities around the world looking to become a yuan trading hub. The city was granted a clearing bank facility in February and a 50 billion yuan (HK$63 billion) investment quota under the RQFII (Renminbi Qualified Foreign Institutional Investor) scheme through which offshore investors can directly purchase mainland stocks and bonds.
Australia also renewed a currency swap agreement worth 200 billion yuan with China in April.
Cities like London, Singapore and Luxembourg are increasingly vying for a bigger slice of the offshore yuan business. Yuan trading volume in both London and Singapore more than doubled last year. Hong Kong, however, remains the largest offshore yuan centre.