Renminbi clearing in Frankfurt
To mark Chinese President Xi Jinping's visit to Berlin, the Deutsche Bundesbank and the People's Bank of China (PBoC) have signed a memorandum of understanding regarding the clearing and settlement of payments denominated in the Chinese renminbi in Frankfurt. Both central banks have agreed to intensify their cooperation in clearing and settlement arrangements of renminbi payments. They also laid the groundwork for establishing a clearing bank.
Expanding trade and investments between Germany and China are projected to further increase the volume of renminbi-denominated payments.
"The Bundesbank supports the creation of a renminbi clearing solution in Frankfurt. The city is one of Europe's foremost financial centres and home to two central banks, making it a particularly suitable location. Renminbi clearing will strengthen the close economic and financial ties between Germany and the People's Republic of China", explained Dr Joachim Nagel, Member of the Bundesbank's Executive Board.
This clearing solution will allow renminbi payments within Germany and with counterparties in China to be cleared and settled in Frankfurt. A clearing bank will be designated to provide this service.
"This will make it much easier for the German real economy to clear and settle payments denominated in renminbi, marking a major step forward in intensifying Germany’s economic relations with China", said Carl-Ludwig Thiele, Member of the Bundesbank's Executive Board.