London Edges Up and Gets Tied with Renminbi Trading Hub

LONDON, U.K. – The impact of Brexit could negatively affect the status of London, considered as a dominant player in the world’s foreign-exchange hub. However, London proved them wrong by edging up against its opponents, the world’s biggest renminbi trading center outside China.

They have increased up to 10% in just the first three months of this year, as the second quarter, around $85bn of renminbi were exchanged in London regularly. This also indicates that they are now 23 percent higher than their status compared to the same period last year. This is all according to the European office of the People’s Bank of China and Monday by the City of London Corporation.

This indicates that London has already garnered around 43.9 percent of renminbi transactions share from April to June. It increased by 38.6 percent compared to its statistics last year. London had gained a $6.6tn-a-day share in the FX market as Hong Kong, Toronto, and Sydney have placed their renminbi shares.

The City of London Corporation policy chair, Catherine McGuinness, said that the UK had been leading the world foreign exchange for so long. It also considered the leading and trusted hub when it comes to renminbi trading. The enormous levels of Chinese currency going in and out of London have outnumbered other financial stations from all over the world.

This massive increase of renminbi trading is considered as a reward of London for their effort that they have started a couple of years ago. China is determined to widen its ownership of currency, challenging the US dollar. It opened an opportunity for UK policymakers and politicians to dominate the trading world outside their mainland, and in turn, have generated billions of tax revenues.

According to a report of The City of London Corporation, the cross-border transactions between China and Britain have grown remarkably as the rise of their trading continues. Over the first 9 months of this year, an increase of up to 48 percent was observed in a total of Rmb377bn.

The Bank of England now allowed the renminbi-denominated bonds and included it in the list of eligible collaterals as a way of testing different ways in which it can develop the renminbi trading in London. It was a move that was headed by the Financial Dialogue and Tenth UK-China Economic last June.

McGuiness said that in times of uncertainty, the strong fundamentals of the UK and London would continue to cast light in the market.