China and Luxembourg Prepare for Currency Clearing Deal – Luxembourg
On 28 June 2014, the central bank of Luxembourg (Banque centrale du Luxembourg) (BCL) and the China’s central bank, People’s Bank of China (PBoC), signed a Memorandum of Understanding (MoU) on renminbi (RMB) clearing arrangements in Luxembourg.
“The MoU aims to establish a cooperation between the two institutions in terms of oversight, exchange of information and assessment pertaining to the RMB business in Luxembourg in view of a forthcoming designation, by the PBoC, of a renminbi clearing bank in Luxembourg,” the BCL said.
The designated bank will be able to supply RMB liquidity in case of a shortage by directly accessing China’s onshore currency market, which will benefit Chinese and Luxembourg “businesses and financial institutions in using the renminbi for cross-border transactions and in further promoting trade and investment”.
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