The Offshore Renminbi Market and Australia

Eden Hatzvi, William Nixon and Michelle Wright
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Eden Hatzvi: Reserve Bank of Australia
William Nixon: Reserve Bank of Australia
Michelle Wright: Reserve Bank of Australia

RBA Bulletin (Print copy discontinued), 2014, 53-62

Abstract: The Chinese authorities have continued to make progress in internationalising China’s currency, the renminbi (RMB). In particular, the use of RMB for cross-border trade and investment transactions has increased noticeably over recent years and the market for RMB in a number of jurisdictions outside of mainland China – known as ‘offshore centres’ – has developed further. As part of this broader trend, the use of RMB by Australian entities has also increased somewhat, although there remains considerable scope for further growth. In order to facilitate this, a number of policy initiatives designed to allow the local RMB market to develop have recently been agreed with the Chinese authorities. Most notably, these include the establishment of an official RMB clearing bank in Australia and a quota that will allow Australian-based entities to invest in mainland China’s financial markets as part of the RMB Qualified Foreign Institutional Investor (RQFII) program.

Keywords: China; Renminbi internationalisation; Financial liberalisation; Clearing bank; Offshore renminbi centres; Offshore RMB market; Australia; Renminbi Qualified Institutional Investor (RQFII) program; Qualified Institutional Investor (QFII) program; Capital account liberalisation; Shanghai-Hong Kong Stock Connect; Dim sum bonds (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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