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LME Clear launches new RMB initiative, Chinese firm to be first member

Xinhua, July 28, 2015 Adjust font size:

LME Clear, the clearing house for the London Metal Exchange (LME) market, announced Tuesday that 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, said LME Clear. Chinese-owned BOCI Global Commodities, a subsidiary of Bank of China, will be the first LME Clear Member to submit CNH collateral.

The Renminbi, or Chinese yuan, is witnessing rapid adoption internationally. According to SWIFT data, the Chinese currency is already one of the top-five global payment currencies.

Charles Li, Chief Executive of Hong Kong Exchanges and Clearing (HKEx), said in a statement: "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."

HKEx Group is the LME's parent company.

Trevor Spanner, Chief Executive of LME Clear, said: "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 internationalization."

LME Clear now accepts five currencies as cash collateral: US dollar, sterling or UK pound, euro, Japanese yen and offshore Renminbi.

Huabin Wang, Deputy General Manager at Bank of China London Branch, said: "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, noted Wang.

In mid June, Intercontinental Exchange (ICE) announced that Bank of China had been approved by ICE Benchmark Administration (IBA) to participate in the gold auction which is used to determine the LBMA Gold Price, which is the benchmark physical gold price in the world. Endit