China's central bank announced on Wednesday that it has authorized China Construction Bank (CCB), the country's second-largest commercial bank, to be the clearing bank for renminbi businesses in London.
The work will be undertaken by China Construction Bank (London) Limited, a wholly-owned subsidiary of CCB, the People's Bank of China (PBOC) said in a statement on its website.
The PBOC made the decision in accordance with a memorandum of understanding (MOU) it signed with the Bank of England on March 31, the statement explained.
The MOU covered renminbi clearing and settlement arrangements in London, aiming to facilitate the use of yuan by banks and other firms in international transactions and to support global trade and investment.
China's central bank said in the MOU that it would appoint the clearing bank for London renminbi businesses at a later date.
Chinese Premier Li Keqiang said in a meeting with British Prime Minister David Cameron on Tuesday that the two countries need to advance financial cooperation, realize direct trading of their currencies, set up an renminbi clearing bank and open branches of Chinese banks in Britain.