DUESSELDORF: A decision by Germany and China to make Frankfurt a European hub for financial transactions in the Chinese currency will give new momentum to trade between the two economic powers, Chinese President Xi Jinping and a German minister said.
In a speech in Duesseldorf, Xi said setting up the hub for the renminbi in Germany “represents an important step on the road of the internationalisation of our currency,” according to a translation.
The Bundesbank and the People’s Bank of China signed an agreement on Friday to facilitate transactions in the Chinese currency in Frankfurt and to cooperate more closely in clearing and settlement arrangements of renminbi payments. Up to now, transactions in China’s currency, the renminbi or yuan, have been impractical for all but very large European companies that are able to involve China’s central bank in a deal, because the renminbi is not freely convertible.
German Economy Minister Sigmar Gabriel said having the clearing bank in Frankfurt would help trade between the two economic powers. “Our goal is an economic partnership of equals.”
Jinping’s first visit to Germany since becoming president last year saw the signing of business deals that will add to trade that was worth about 140 billion euros last year.Reuters
