Swiss seek offshore yuan trading

by swisscham in Business

Switzerland wants to become an offshore yuan trading centre in Europe, competing with Frankfurt and London to corner trade in China’s currency. […] While no official talks have taken place, Schneider-Ammann said he hoped the idea would become “more serious” in the coming weeks or months. London, the centre of the world’s USD 4 trillion-a-day market for foreign exchange trading, claims to have the edge in Europe after the Bank of England signed a three-year currency swap line with the People’s Bank of China last month. A group representing Frankfurt’s financial industry predicted last week that the European Central Bank would get a swap deal that would allow it to exchange euros for as much as RMB 800 billion (HKD 1.01 trillion) – four times the size of the Bank of England agreement. To have a trading hub, a central bank must have an agreement with the PBOC to swap its currency for yuan. This gives a central bank access to yuan funds to back up firms doing business with Chinese partners.

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