Britain cements role as leading hub for offshore yuan trading

A staffer poses with 2015 edition of the 100 renminbi notes at the Bank of China Tower in Hong Kong, China November 12, 2015. REUTERS/Bobby Yip

LONDON (Reuters) - Britain has retained its position as the biggest hub for offshore trading of China’s renminbi currency, according to a report published on Wednesday, with transacted volumes reaching a record high in 2018.

Daily traded volumes of the offshore yuan in London topped a record 69 billion pounds ($90.8 billion) in the second quarter of this year, up 32.85 percent on a year earlier, the City of London corporation said in a report using a mix of data central bank and SWIFT data.

London accounted for 38.63 percent of daily FX transaction volumes in offshore renminbi, ahead of nearest rival Hong Kong, on 26.65 percent, the City of London Corporation said in its report.

Britain, home to the world’s largest foreign exchange centre, has made a big push in recent years to attract offshore yuan business to its shores.

The rise in yuan trading in London tallies with a broader expansion in foreign exchange trading volumes in the British capital.

Reuters reported in August that London had extended its lead as the biggest currency trading hub in the past two years despite the 2016 vote to leave the European Union.

Beijing has been trying to promote international trading of the renminbi but the currency’s share of international payments remains tiny, at 1.61 percent, according to a January report by global payments tracker SWIFT.

The London-based renminbi credit market has struggled to grow, the City of London also said in its report. The balance of renminbi deposits in London totalled 68.7 billion yuan ($10 billion), down 12.75 percent year-on-year, while outstanding loans in the offshore London market dipped 11.42 percent to 58.93 billion renminbi, according to the report.

Reporting by Tommy Wilkes; editing by Andrew Roche