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BEIJING Feb 8 China has named Industrial and
Commercial Bank of China (ICBC) , the
world's biggest bank, as the clearing bank for offshore yuan
business in Singapore.
"Based on the arrangement between the People's Bank of China
and the Monetary Authority of Singapore to strengthen
cooperation in financial services, the PBOC has decided to
authorise ICBC's Singapore Branch as the clearing bank of
renminbi business in Singapore," the central bank said in a
statement on Friday on its website, www.pbc.gov.cn.
Singapore issued full banking licenses to ICBC and Bank of
China in October, moving closer to getting
a yuan clearing bank that will let it compete more aggressively
with other global financial centres in the growing market for
yuan-denominated trades and financial products.
"This may pave the way for the start of an offshore
deliverable market (in Singapore) similar to the ones in Hong
Kong and Taiwan," Dariusz Kowalczyk, senior economist and
strategist for non-Japan Asia at Credit Agricole CIB in Hong
Kong, said after the PBOC announcement on Friday.
Taiwan joined Hong Kong and London as an offshore yuan
trading centre on Wednesday, a further step in Beijing's march
to boost the currency's global reach and promote deeper economic
integration with its one-time political foe.
That followed the signing of a clearing settlement agreement
in January between China's central bank and Bank of China's
Taipei branch - the yuan clearing bank for Taiwan.
The competition to become a major centre for offshore yuan
transactions has intensified over the past year as China shows
an increasing willingness to loosen capital controls and
promotes the use of its currency for trade settlement.
Singapore and other global financial centres like London are
seeking to capitalise on the rapid growth of the off-shore yuan
bond market, which is dominated by Hong Kong.
Singapore is the world's fourth-largest forex trading centre
and the main Asian base for oil and commodity traders.
China's state-run Xinhua news agency said in June 2012 that
the Southeast Asian city-state has around 60 billion yuan ($9.54
billion) in yuan deposits.[ I D:nL3E8HD01P]
Yuan deposits in Hong Kong increased to 603 billion yuan
($96.9 billion)in December, up 5.6 percent from a month earlier,
data from the Hong Kong Monetary Authority showed.
(Reporting by Kevin Yao; Editing by Nick Edwards & Kim Coghill)