NEW YORK - A working group on renminbi trading and clearing was set up in the New York Cityon Monday with former NYC mayor and business tycoon Michael Bloomberg serving as the chairof the group.
The group said enabling renminbi-denominated transactions to be cleared in the United Stateswill sharpen the competitiveness of US companies by lowering transaction costs, and bringabout direct benefits to the US economy.
The move is one of the results of Chinese President Xi Jinping's state visit to the United States inSeptember when both Xi and President Barack Obama agreed to further deepen financialcooperation between the two countries.
"President Obama and President Xi came to an important agreement that will greatly benefitboth the United States and China, and it's now incumbent on US industry to follow their lead,"said Bloomberg.
The formation of The Working Group on US RMB Trading and Clearing follows that agreement,with the objective of charting a framework and roadmap that will make it easier for US institutionsto make or receive renminbi payments, subject to review by US authorities, thereby lowering theirtransactional costs, increasing their efficiency and helping them build stronger trade andbusiness partnerships -- which in turn will create more jobs and lead to further US economicgrowth.
The group will initially include the following member institutions: The US Chamber of Commerce,Bank of America, BNY Mellon, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley, WellsFargo, Agricultural Bank of China, Bank of China, Bank of Communications, China ConstructionBank, Industrial and Commercial Bank of China, Additional firms are expected to join the groupin the near future.
Tom Donohue, president and CEO of the US Chamber of Commerce, said, "Creating a Chinesecurrency trading mechanism in the US makes it easier for American businesses to sell goods inChina and will help the yuan evolve into a free floating currency."
Tian Guoli, Bank of China's chairman of the Board of Directors said, "We are pleased to join theworking group as an initial member, and work with business leaders from China and the US toadvance a mechanism to trade and clear renminbi in the US".
Also on Monday, the International Monetary Fund (IMF) said that China's renminbi is eligible forjoining the Special Drawing Rights (SDR) basket as an international reserve currency.
The decision marked a milestone in the internationalization of the renminbi. The inclusion of therenminbi will take effect Oct 1, 2016, the IMF said in a press release.
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