Needed to improve liquidity.
Chancellor George Osborne is leading a drive to make London an offshore trading center for the renminbi or yuan and last month eased rules for Chinese banks to open shop in Britain.
The offshore renminbi bond market has been slow to develop in London, however, while clearing of renminbi foreign exchange transactions takes place only via Hong Kong.
The Bank of England and the People’s Bank of China signed a renminbi swap line earlier this year to make it easier for traders in London to access the renminbi.
"We will work together to keep (the market) liquid, including through appropriate settlement and clearing arrangements such as a London clearing bank," said Sajid Javid, financial secretary to the UK Treasury.
The renminbi has advanced rapidly as an international currency and is now the 12th most used payment currency in the world. Only 13% of China's trade with the rest of the world is currently settled in renminbi.
Do you know more about this story? Contact us anonymously through this link.