Working group releases roadmap to promote US RMB trading, clearing

Source:Xinhua Published: 2016-6-9 10:34:56

A non-government working group released a roadmap Wednesday on the trade and clearing of the Chinese yuan in the United States following a key high-level economic dialogue between the two countries. 

The "Roadmap for Action" offered commitments and suggestions from the Working Group on US RMB Trading and Clearing to promote the use of the Chinese currency on the US market. 

The Working Group, a collection of senior leaders in finance and US industry, was formed to explore new ways to facilitate RMB trading, which was agreed by the two countries' leaders during the US-China summit in September 2015. 

China will grant the United States a quota of 250 billion yuan (38 billion US dollars) under the country's Renminbi Qualified Foreign Institutional Investor (RQFII) program and appointed one Chinese and one US bank to conduct RMB clearing business in the United States, according to the statement released after the Eighth Round of China-US Strategic and Economic Dialogues (S&ED). 

"I want to congratulate US and Chinese leaders on a productive Strategic & Economic Dialogue. It's very encouraging that both sides have endorsed a framework for facilitating RMB trading and clearing in the US for the first time," said Michael R. Bloomberg, chair of the Working Group and founder of Bloomberg L.P. 

 "This will help bring new momentum to the working group's efforts to expand trade between the United States and China by allowing the RMB to be cleared in the US" he added. 

A survey conducted by the working group showed that demand for RMB-denominated products and services in the United States is growing, and could be fueled by certain events, such as the potential inclusion of Chinese debt and equity securities to major securities indices. 

The findings also suggest that US-based customers, especially small and middle-market businesses, would like more options to use RMB in the United States to reduce complications currently associated with accessing overseas accounts and making and receiving RMB payments. 

Based on these findings, the working group committed to improving domestic banking services, enhancing existing financial market infrastructure and developing new markets, including RMB-denominated cash management and fixed-income products issued in the United States. 

It also suggested that the two countries should further improve access to Chinese capital markets for US-based participants, establish one or more clearing banks or clearinghouses in the United States and institutionalize an ongoing dialogue on RMB internationalization between the two countries. 

"We are pleased to see that the S&ED has wisely agreed upon a significantly higher RQFII allocation that better reflects the size of the US asset management industry, which is currently the world's largest. This is a highly encouraging development that will benefit businesses in both nations," Bloomberg said.

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