Michael Bloomberg to chair group to establish yuan clearing in U.S.

Former New York City mayor Michael Bloomberg speaks to media people after a meeting at the Elysee palace in Paris, France, June 30, 2015. REUTERS/Charles Platiau

NEW YORK (Reuters) - Former New York City Mayor Michael Bloomberg will chair a group that will push to establish a clearing hub for China’s renminbi currency in the United States, the group said on Monday.

The move comes as the International Monetary Fund plans to announce that the renminbi, or yuan, will be added to its reserve currency basket, an acknowledgment of the nation’s importance as a world economy. Its weight in the index is unclear.

In August of this year, the yuan ranked fourth in terms of world payments, with about 2.8 percent of transactions, an area where the dollar and euro are most dominant. Sterling ranks third, according to global transaction services company SWIFT.

The group said enabling renminbi-denominated transactions to be cleared in the United States would improve U.S. companies’ competitiveness. Currently, financial transactions in yuan cannot be settled in the United States, so such transactions need to be handled by overseas firms.

“Advancing a mechanism to trade the Chinese currency in the United States will improve the competitiveness of U.S. companies, while furthering America’s financial sector and economy. I’m very pleased to lead this new group and help move this along,” Bloomberg said in a statement.

The working group includes former Securities and Exchange Commission Chair Mary Schapiro as vice-chair, U.S. Chamber of Commerce President and Chief Executive Thomas Donohue and former U.S. Treasury secretaries Timothy Geithner and Henry Paulson.

Reporting by Sam Forgione; Editing by Dan Grebler