London retains top spot as RMB market place

London now represents nearly half of all offshore RMB foreign exchange trading globally, remaining the world leader, thanks to positive foreign exchange of RMB internationalization, according to a report published on Thursday.

The fourth London RMB Business Quarterly, produced by the City of London Corporation in partnership with the People's Bank of China, also known as PBoC, reveals that in the first quarter of 2019, the average daily trading volume of the Chinese currency in London was more than 78 billion pounds ($94.6 billion), up 30 percent year-on-year. The UK capital now accounts for 44.46 percent of the total global foreign exchange transactions.

The report also reveals that cross-border receipts and payments between China and the UK saw massive growth, hitting more than 55 billion RMB, up 86 percent on February 2019 and more than 100 percent on the same month in 2018.

Investor appetite for so-called Dim Sum bonds remains large, with two more added to the London Stock Exchange in May 2019, meaning 101 Dim Sum bonds are now listed on the Exchange with an outstanding value of 27.63 billion yuan. The bond, named after the popular Cantonese food, refers to a yuan-denominated debt instrument issued by foreign investors.

Catherine McGuinness, Policy Chair at the City of London Corporation, said: "This report shows yet again that London continues to dominate the RMB offshore market.

"More importantly, it reveals that the fundamentals of London remain strong in the face of uncertainty, particularly in terms of foreign exchange.

"Few will deny that Chinese currency is set to become a more important player on the world stage, particularly through the lens of China's Belt and Road Initiative," she continued.

"As London is the FX (foreign exchange) capital of the world, it's obvious that the RMB should be traded and cleared here."

Jin Mei, chief representative of the PBoC in Europe, said: "In line with the initiative of the Belt and Road, the usage of RMB in countries along the Belt and Road has been steadily expanded. The aim of our latest report is to focus on the RMB cross-border usage along the Belt and Road countries, which could be the catalyst for RMB internationalization in the future.

"PBoC will continue optimizing policies on RMB cross-border use, improving the infrastructure for the global use of RMB, meeting the reasonable demands of market entities and pushing the global use of RMB to a new level," she added.