Wednesday, January 21, 2015

Yuan Clearing to be Established in Switzerland

The Swiss National Bank and the People’s Bank of China intend to establish yuan clearing in Switzerland, a step designed to help increase cross-border transactions in the Chinese currency.  The PBOC would also extend the pilot project known as Renminbi Qualified Foreign Institutional Investor to Switzerland with a quota of 50 billion yuan ($8 billion), the SNB said in a statement Wednesday announcing the signing of a memorandum of understanding between the two central banks.

The deal “will promote the use of the renminbi by enterprises and financial institutions in cross-border transactions, and promote facilitation of bilateral trade and investment,” said the SNB, based in Bern and Zurich.

China is loosening exchange-rate controls in an overhaul of its economy. At the same time, Swiss banks are pushing for the country to become a center for yuan trading in Europe, as they face the prospect of losing banking secrecy for offshore clients.

Bloomberg

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