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Interview: Switzerland glad to become new offshore RMB hub in Europe

Xinhua, October 21, 2015 Adjust font size:

Switzerland welcomes Chinese banks' presence in the country and is delighted to become a new offshore RMB center in Europe, said Heinrich Siegmann, senior international advisor of Swiss Bankers Association on Tuesday.

The Swiss Financial Market Supervisory Authority (FINMA) has authorized China Construction Bank to establish a branch office in Zurich, FINMA's spokesperson Vinzenz Mathys confirmed Tuesday.

This authorization is considered to be an important step for Switzerland to become a new RMB offshore hub in Europe, right after London, Frankfurt and Luxembourg.

"It was very clear to us that yuan would become more important as an international currency in the trade area," said Siegmann in an interview with Xinhua, "Given the Chinese government's commitment to internationalize the renminbi, it's pretty clear to us that Switzerland as a leading financial center should be able to use this currency for its wider possible service."

"As the leading center for international wealth management, we believe that many clients of Swiss banks and also Chinese banks coming to Switzerland would like to be able to use Chinese currency, for diversified investment purposes," Siegmann explained.

Meanwhile, it follows naturally that Switzerland, which has many world-leading firms on commodity trading, should also become an offshore RMB center, since China is a major destination for commodity trade and it would be intuitive that the renminbi should become one of currencies used for commodity trading in the future, he continued.

If the renminbi payment service could be more easily available, if the exportation from China and Switzerland could be invoiced in renminbi, it would also reduce the cost of transactions and improve the bilateral trading volume between the two countries, he added.

In January, China and Switzerland agreed to set up the first branch of a Chinese bank in the Swiss financial hub of Zurich for future renminbi clearance. The establishment of the offshore RMB market in Switzerland is considered to mark a crucial step in the internationalization of the Chinese currency.

The Chinese and Swiss central banks already signed a bilateral currency swap agreement worth 150 billion yuan (24 billion U.S. dollars) in July last year, which was intended to provide liquidity support to economic and trade exchanges between the two countries. Endit