Bank of China...Sydney

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    Business Spectator:

    Reserve Bank governor Glenn Stevens has made his first public appearance since last week's historic rate cut, launching Australia's official Chinese renminbi trading hub.
    Mr Stevens on Monday launched the Bank of China in Sydney as the official clearing bank for the Chinese currency in Australia, making Sydney one of just a handful of locations for the clearing of transactions in yuan, also known as the renminbi.
    The Sydney trading hub was announced last year as a side deal to Australia's free-trade agreement with China, as part of an agreement between the RBA and its Chinese counterpart, the People's Bank of China.
    The establishment of the official clearing bank would help strengthen trade relations between China and Australia, helping to open up China's economy to Australian businesses, Mr Stevens said.
    The RBA last week slashed Australia's cash rate to a new record low of 2.25 per cent, although today's comments by Mr Stevens made no mention of monetary policy.

    “The key direct benefit of the official Australian [renminbi] clearing bank is that it can more efficiently facilitate transactions between Australian firms and their mainland Chinese counterparts using the Chinese currency,” Mr Stevens said.
    “Over the long run, Chinese firms may increasingly wish their trade with Australian firms to be settled in [renminbi],” he said.
    Mr Stevens also said the RBA had invested "a small proportion" of Australia's foreign currency reserves in the Chinese currency.
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