Hong Kong Exhanges and Clearing have signed an agreement with the London Metal Exchange and Bank of China, moving a step closer to offering renminbi clearing of metals contracts.
This would give Chinese investors better access to the LME by allowing them to use their local currency when trading. At present, while contracts are denominated in dollars, the LME have been offering clearing in other currencies like sterling and the euro, and have been moving towards renminbi clearing even before the exchange was bought by the HKEx last year.
The LME also hopes to offer in-house clearing by September 2014 (currently performed by LCH.Clearnet).
The move is reflective of the growing influence of both the renminbi and the Asian market in the metals industry.
LME, HKEx and Bank of China are exploring clearing renminbi commodity products on the LME. Another big step in the LME's Asian push.— Francesca Freeman (@FrankieJFreeman) June 24, 2013