(Left) The headquarters building of the People's Bank of China in Beijing, capital of China. (Right) Rinminbi banknotes in 100-yuan denominations. (Xinhua)
JOHANNESBURG, July 8 (Xinhua) -- China's central bank has authorized the Bank of China (BOC) to serve as the clearing bank for renminbi business in South Africa.
The authorization came after the People's Bank of China (PBOC), the central bank, signed a memorandum of understanding (MOU) with its South African counterpart on Tuesday to set up a yuan clearing system in South Africa.
Yuan clearing business will be carried out by the Johannesburg branch of BOC, the country's third largest commercial bank by market value, according to a PBOC statement.
Both central banks agreed to cooperate on the supervision and clearing of yuan business in South Africa and to exchange information to improve bilateral trade.
The MOU is for the purposes of clearing and settlement of yuan in South Africa, said the South African Reserve Bank (SARB).
"Both central banks agreed to coordinate and cooperate on the supervision, oversight and clearing of renminbi (Chinese currency) in South Africa and also to exchange information in order to facilitate the continuous improvement and development of bilateral trade," said Candice Jeffreys, Media Coordinator of the SARB.
The MOU marks another important milestone through joint efforts to build capabilities in South Africa's financial markets to better serve bilateral trade, investment and financial flows between China and South Africa, Jeffreys said.
China is now South Africa's largest export partner.
The move will expand the list of countries with direct access to trade in the Chinese currency.