Bank of China Chairman Tian Guoli (second from left) attends "ring the bell markets opening" ceremony at the Euronext headquarters in Paris on Monday, the day when the bank issued bonds on Euronext. Photo: AFP

China's central bank, the People's Bank of China (PBC), said Monday it had approved Bank of China (BOC), one of the nation's four biggest lenders, to be its designated yuan currency clearing house in Paris.

In June, China and France signed an agreement for yuan clearing arrangements, one of a number of such accords China has sought with foreign countries to help boost the use of its currency overseas.

Yuan clearing allows companies and financial institutions to use the currency for cross-border transactions, and promotes liberalization of trade and investment.

The PBC said in a brief statement posted on its website that the Paris branch of BOC would take up the clearing role following agreement with France's central bank.

Transactions organization SWIFT said last month that Europe represents 10 percent by the value of global payments in the yuan. Over the past year, France's yuan payments have jumped almost 44 percent, it said.

China's Hong Kong SAR is the dominant center for offshore yuan trading. In July, China designated Bank of Communications as the clearing bank in Seoul for yuan transactions in South Korea.

Before that, it named Bank of China the clearing bank for yuan dealings in Frankfurt, Germany, and China Construction Bank in London.

European countries are competing to become the dominant hub for yuan business in the continent.

China keeps a tight grip on the value of the yuan and limits capital flows in and out of the country due to fears they could disrupt the economy.

But authorities have moved gradually to liberalize the yuan's movements and allow a more market-oriented exchange rate.

AFP