The offshore renminbi market in London developed rapidly in the first half of 2013, a new report reveals.
A study by Bourse Consult on behalf of the City of London Corporation has found that growth in trade-related services was particularly fast in the first six months of the year, with the value of letters of credit surging to ¥3.3bn.
Over that period, a number of major banks also reported more requests from UK-based banking customers looking to make payments in the Chinese currency.
London also saw renminbi FX activity climb by nearly a third during 2013. Spot trading reached a daily value of $4.8bn, close to double that of 2012. Trade financing tripled in the period between 2011-2013 and there has been a 110% increase in FX instrument trading.
The renminbi market in London is developing across a broad spectrum of products and services, the research found. Data for the first half of 2013 shows a rise in deposits from the previous high of ¥14.2bn in June 2012 to ¥14.5bn.
Mark Boleat, policy chairman at the City of London Corporation, said: “On a global scale, the importance of the renminbi has continued to increase. The comprehensive deepening of reform across the Chinese financial markets is paving the way for further renminbi internationalisation. The City of London initiative supports these developments and is working hard to ensure that the UK’s position as the Western hub for renminbi continues to strengthen.”
Sajid Javid, financial secretary to the treasury, said: “London is already the world’s Western renminbi hub and we will continue to work closely with the private sector, and the Chinese and Hong Kong authorities, to ensure it goes from strength to strength.”
Sally Percy is editor of The Treasurer