The internationalisation of the Chinese renminbi will move a step further this week when Clearstream, the international central securities depository, begins settling renminbi-denominated securities.
Chinese renminbi held outside of mainland China will become a full settlement currency on Clearstream’s local Hong Kong platform starting from 27 September.
RMB bonds issued via the Central Moneymarkets Unit in Hong Kong are eligible for settlement in Clearstream.
BOC International Holdings and Standard Chartered Bank (Hong Kong) will be the first market participants to issue securities in RMB, Clearstream, the settlement division of Deutsche Borse, said last week.
Philippe Metoudi, head of client relations, Asia Pacific, Middle East and Africa at Clearstream says, “Over the 22 years that I have worked in Hong Kong, this is definitely one of the most important breakthroughs for investors. Our customers will be allowed to buy and hold RMB in Hong Kong.
“These developments mark a new milestone for the ongoing evolution of the Asian markets in the international financial environment,” he adds.
Clearstream’s network reaches 47 domestic markets around the globe: 30 in Europe, five in the Americas, 10 in the Asia Pacific region and two in the Middle East and Africa. It allows counterparties in local markets to settle eligible securities through Clearstream’s operational hubs in Luxembourg and Singapore.
The renminbi market in Hong Kong is being liberalised and the government is expected to soon announce guidelines for allowing offshore pools of the Chinese currency into the domestic interbank market.