FRANKFURT, March 28 The central banks of Germany
and China signed an agreement on Friday to facilitate
transactions in the Chinese currency in Frankfurt, the
Bundesbank said, making Germany's financial capital the first
hub for such payments in Europe.
The Bundesbank and the People's Bank of China signed a
memorandum of understanding during Chinese President Xi
Jinping's state visit to Germany on Friday, ahead of a similar
agreement between China and Britain expected on Monday.
"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", Bundesbank board member Carl-Ludwig Thiele said.
The two central banks agreed to intensify their cooperation
in clearing and settlement arrangements of renminbi payments and
laid the groundwork for establishing a clearing bank.
Financial sources told Reuters on Thursday subsidiaries of
Chinese banks such as the Bank of China would be
considered for the clearing bank.
(Reporting by Eva Taylor; Editing by Alison Williams)