Canada to Finalize Creation of Yuan Clearing Hub
Canada is expected to finalize the setting up of a yuan clearing hub in the country. Later this week both China and Canada are expected to finalize and proceed to announce the currency hub. The planned move is in line with the country’s ambition to promote its currency to more international investors and eventually make it into a global reserve currency.
Earlier this week Qatar became the first hub in the Middle East to have clearing transactions in yuan, a step that will help oil exporting countries in the Middle East to reduce dependence for the U.S. dollar. The Industrial and Commercial Bank of Chin in Doha was appointed as the clearing Bank for yuan deals in Qatar. Also in the past two years China have appointed clearing banks for London, Frankfurt, Singapore, Luxemburg, Paris and Seoul while Macao and Hong Kong has appointed clearing banks earlier.
Vancouver and Toronto have been actively stating that they are eager to host the clearing hub, but sources familiar with the matter said that Toronto edged past Vancouver in the process. A clearing bank will be able to handle all parts of a transaction when a commitment is made until such deal is made. Having a bank that can reduce costs and the time taken for trading can definitely boost activity in the financial sector.