The South African Reserve Bank (SARB) and the People’s Bank of China (PBoC) have announce the signing of a Memorandum of Understanding (MoU) for the purposes of clearing and settlement of Renminbi in South Africa.
Renminbi is the official name of the Communist People’s Republic of China and means “the people’s currency” while the Yuan is the name of a unit of the Renminbi currency.
Both central banks have agreed to coordinate and cooperate on the supervision, oversight and clearing of Renminbi in South Africa, “and also to exchange information in order to facilitate the continuous improvement and development of bi-lateral trade,” a statement released by the SA Reserve Bank said.
“The MoU signifies another important milestone reached in the continuous joint effort to build capabilities in the South African financial markets to better serve bilateral trade, investment and financial flows between China and South Africa,” the statement said.
“China has become South Africa’s largest export partner and consequently, Renminbi clearing in South Africa will be immensely valuable as corporates will benefit greatly from trading and settling in Renminbi.”
The department said that opening a clearing centre in the country should boost trading in the Rand/Renminbi, which could make it easier and cheaper to trade in goods and services with China.