Bank of Communications designated as clearing bank for won-yuan trading

The Bank of Korea said the People’s Bank of China has appointed the Bank of Communications Ltd. as a clearing bank for the direct won-yuan trading in Korea, which we reported on last week. Bank of Communications was founded in 1908, and is one of the largest banks in China.

Chinese President Xi Jinping and his Korean counterpart President Park Geun-hye had agreed on the 3rd of July to create a direct won-yuan trading market in Seoul as early as this year to reduce transaction costs and foreign exchange risks without the mediation of major currencies such as the U.S. dollar.

Bank of Communications chairman Niu Ximing said on the same day, “By pushing forward with establishing the direct won-yuan trading market in Seoul, we’d like to strengthen ties among Korea’s financial service firms, manufacturers, and financial market participants… Given China has been the most important trading partner for Korea for nine consecutive years, there is so much potential for the market to grow fast,” he concluded.

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