Westpac's ability to tap the booming trade between Australia and China will strengthen if CBRC grants the license.
Australia's Westpac Banking Corp. has applied to conduct local-currency banking in mainland China, joining a growing list of foreign banks seeking to beef up yuan-related services amid increasing use of the currency in international transactions.
A yuan license from the China Banking Regulatory Commission would boost Sydney-based Westpac's ability to finance cross-border trade in the yuan, also known as the renminbi, and to make loans in the Chinese currency, Rob Whitfield, head of Westpac's institutional bank group, told The Wall Street Journal. Currently, the bank has to team up with Chinese banks to provide trade financing in renminbi.
It expects to receive the license by the end of the year, he said.
The Chinese government, which limits access to the yuan for investment purposes, has been pushing for its currency to play a greater role in settling international trade, hoping to chip away at the global dominance of the U.S. dollar. In the first quarter, the equivalent of $55.2 billion or 7%, of China's foreign trade was in yuan, up from 0.5% a year earlier.
That small but rapidly growing international role has led many foreign banks to expand their yuan-related services. Among the banks granted yuan licenses since late last year are Germany's Commerzbank AG and BNY Mellon Corp. of the U.S.
View the full story in The Wall Street Journal.
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