China greenlights more business for RMB clearing banks

BEIJING - China's central bank announced Friday overseas renminbi (RMB) clearing banks will be allowed to conduct more business including interbank borrowing.

The People's Bank of China (PBOC) will grant overseas RMB clearing banks permits for interbank borrowing, cross-border account financing and bond repurchases business under the current policy framework, according to an official statement, which said the move would provide liquidity support to offshore RMB markets.

RMB clearing banks in Hong Kong and Macao will not be required to hold deposit reserves at the PBOC Shenzhen and Zhuhai branches.

Given the policy loosening, the central bank asked the RMB clearing banks to strengthen liquidity management and make risk-responding plans.

The PBOC also said it would ensure effective bilateral currency swaps to facilitate trade and investment, and improve currency exchanges to help foreign investment into China's stock market.

The move came as the latest effort from the central bank to promote the country's financial opening up and the internationalization of the Chinese currency RMB, which has been more frequently used around the world after being included into the Special Drawing Right basket of the International Monetary Fund.