Switzerland's central bank said today in a statement that it had agreed with the People's Bank of China to establish clearing arrangements in Switzerland for renminbi trading and extend a pilot scheme for clients of Swiss banks.
"It will promote the use of the renminbi by enterprises and financial institutions in cross-border transactions, and promote facilitation of bilateral trade and investment," the Swiss National Bank said.
Alongside the pact, the PBOC will extend a pilot scheme for foreign investors to clients of Swiss banks, with a quota of up to 50 billion yuan ($8 billion).
From Davos, Reuters adds:
"We are willing to make Switzerland one of the centers of offshore RMB business," Chinese Premier Li Keqiang told the World Economic Forum.
He said China was committed to opening up more to the outside world, and planned to deepen reforms of financial services and foreign exchange.
Until recently, 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.
In the past five years, China has promoted use of the yuan for trade and investment, and also as a reserve currency to help lower currency risks for Chinese companies and challenge the dollar's global dominance over the long term.Can a "speculator attack" on the yuan-dollar peg be far behind?