On China’s long march towards the full convertibility of its currency, the designation of Hong Kong as an offshore financial centre for the renminbi in 2009 was a key step.
Now Beijing has signalled its choice of the next location for its experiment, as part of what many assume will be the ultimate globalisation of its currency. Singapore has edged ahead of London after Beijing this month said it would authorise one of its banks as a clearing bank for renminbi in the city-state.
That would enable Singapore-based banks – including branches of foreign banks such as Standard Chartered and Citi – to skirt the multiple custodial relationships with their peers in Hong Kong to access the currency at Bank of China’s branch, the sole designated offshore clearing bank.