With China being the second largest economy in the world and poised to grow even more, it is “just natural” that the importance of its currency renminbi (RMB) is likewise growing, the City of London policy chief has stated.
As the Chinese economy grows, “undoubtedly, its currency is going to also get importance and as China seeks to internationalize it, then obviously we will see the RMB continues to be a considerable currency in global markets,” stated Catherine McGuinness, chair of the Policy and Resources Committee at the City of London Corporation.
London has played a role in the advancement of the Chinese currency, as it has ended up being the world’s leading offshore RMB trading. “We’ve seen a great growth in the trading of the RMB over the last couple of years,” McGuinness stated in a current interview with Xinhua.
According to the London RMB Business Quarterly report issued in March, the typical daily overseas RMB trading volume in London saw a 7-percent boost year on year in 2021, and there was a 130-percent increase in the worth of the RMB-dominated Dim Sum bonds that were noted on the London Stock Exchange.
Mentioning the appeal of the RMB in London, McGuinness informed Xinhua that it is “not surprising” as London is the center for foreign exchange, and “we have a strong connection with sell China.”
“We fully anticipate London with its international reach, its ingenious community, to remain at the heart of currency trading moving forward,” she said.
Speaking of the community and chances London uses, McGuinness stated the Shanghai-London Stock Connect, for instance, is “a great example of how an innovative product can be utilized to enable investors to gain access to China’s markets and Chinese investors, to gain access to financial investment opportunities themselves.”
“It’s just one instance of how we might deal with London’s community and with the innovation that you can find here in order to offer access to worldwide investment in capital markets,” she added.
Now there are more than 40 Chinese financial institutions in the City of London, she said.
“I think they’re an exceptional bridge to the opportunities that this worldwide monetary center can bring. They can assist link besides the worldwide organizations with the trading opportunities that there are here,” she worried.
On the effect of COVID-19, McGuinness said that “the pandemic has actually been an obstacle for everyone, but it hasn’t stopped trading in the worldwide financial center, which London is.”
“People have needed access to capital, they’ve required access to forex,” she included.
When it comes to the prospect of the RMB’s internationalization, McGuinness noted that “there are lots of challenges that all of us deal with in the years ahead.”
“There will be changes ahead, depending on how the world moves, however we will likewise see the RMB continues to be an important player on the international phase,” she said.