Luxembourg Central Bank and PBOC announce RMB clearing bank
As Luxembourg continues to grow as RMB hub in Europe, Minister of Finance Mr. Pierre Gramegna is leading a delegation of 70 top executives from the financial and related sectors to China. Reinforcing strengthened ties between the two countries, on the first day of his visit to Beijing, Minister Gramegna announced the signing of a Memorandum of Understanding between Luxembourg's Central Bank and the People's Bank of China setting the framework for a future designation of a Renminbi clearing bank in Luxembourg.
Minister Gramegna underlined the importance of this new step towards the internationalisation of the Chinese currency and welcomed this agreement as a recognition of the important role the Luxembourg financial center plays in this context. Today Luxembourg is already the leader in many Renminbi related activities and hosts the European headquarters of the largest Chinese banks.
Moreover, Minister of Finance Mr. Pierre Gramegna announced: “China Merchants Bank has decided to start the process of setting up in Luxembourg, thereby further confirming Luxembourg’s role as the prime European hub for Chinese banks. Luxembourg continues to prove that despite our small size, it is a major partner for China. The Grand-Duchy offers an internationally-oriented business hub, well-positioned to efficiently support the activities of Chinese banks in the European market. We have been pleased to host Bank of China, ICBC and China Construction Bank and welcome this new player coming to Luxembourg.”
Finally, Minister Gramegna attended the signing ceremony of a Memorandum of Understanding between the Asset Management Association of China (AMAC) and Luxembourg’s Investment Fund Association (ALFI). The agreement between AMAC and ALFI focuses on developing activities to create mutually beneficial opportunities for the fund industries in both countries. Luxembourg is the second largest investment fund industry in the world after the United States and the largest in Europe. It is a valuable partner for the Chinese asset management industry in its strive to diversify internationally.
In just a short time, the RMB has become one of the world’s most in-demand currencies and the internationalisation of the Chinese yuan has created the need for convenient hubs in Europe. With its historical roots in international finance, Luxembourg has been at the forefront of this development. Luxembourg's Stock Exchange was the very first Stock Exchange outside Greater China to list a bond denominated in Renminbi. That was in May 2011 for Volkswagen AG and since then 45 multinational companies and sovereigns have used the Luxembourg Stock Exchange to fulfill their Renminbi liquidity needs.