Speech Summary Remarks at the Launch of the Official Australian Renminbi Clearing Bank

The remarks note the importance of the launch of the official renminbi (RMB) clearing bank in the development of the Australian RMB market as another step in the lengthy and very important journey that has seen the flowering of trade relations between China and Australia. The remarks highlight that the key direct benefit of this milestone is more efficient facilitation of transactions between Australian firms and their mainland Chinese counterparts using the Chinese currency. They go on to suggest that an important indirect effect will be the raising of awareness that the Australian financial system has the capacity to undertake cross-border RMB transactions. The remarks also highlight other initiatives in which the Reserve Bank has been involved that will support the development of the RMB market in Australia: the establishment of a bilateral local currency swap line in 2012 between the Reserve Bank of Australia and the People's Bank of China; and the negotiation of a quota that allows Australian firms to invest in approved mainland Chinese securities. It is also noted the RBA has invested a small proportion of Australia's foreign currency reserves in RMB. The remarks conclude with the observation that Australian firms that increase their familiarity with RMB are likely to be well placed to take advantage of opportunities as the Chinese authorities make further progress in internationalising the RMB and liberalising the capital account of China's balance of payments.

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