LME Clear, the clearing house for the London Metal Exchange (LME) market, announces today it can now accept offshore renminbi (CNH) as eligible cash collateral, effective immediately. This follows regulatory approval for the initiative from the Bank of England.
The renminbi is seeing rapid adoption internationally. According to Swift data, the Chinese currency is already one of the top-five global payment currencies.
“This is an important development for the LME and LME Clear, and it highlights the stronger ties and synergy between Hong Kong and London since the LME became part of the HKEx Group,” said Charles Li, Chief Executive of Hong Kong Exchanges and Clearing (HKEx), the LME’s parent company. “We will continue to explore ways the Group can do more to attract and connect market participants from Mainland China and the rest of the world.”
“The renminbi is on its way to becoming one of the world’s most widely used currencies, and we are pleased to be able to help our members take advantage of the opportunities arising from the renminbi’s internationalisation,” said Trevor Spanner, Chief Executive of LME Clear.
The initiative comes in response to calls from LME Clear members to extend the list of accepted cash collateral to include CNH. Chinese-owned BOCI Global Commodities will be the first LME Clear Member to submit CNH collateral.
“We welcome LME Clear’s renminbi initiative, which marks a milestone in providing tailored clearing services for the global metals industry. BOCI was LME Clear’s first Chinese member, and parent company Bank of China will be its first Chinese settlement bank with renminbi capability. This demonstrates the commitment of BOC to develop itself as a truly global bank,” said Huabin Wang, Deputy General Manager at Bank of China London Branch.
To view the release from the LME, click here.