The Bank of England is close to signing a deal with the People’s Bank of China that should help the City of London become a trading hub for the world’s fastest-growing currency, the yuan.
The UK central bank expects to sign a three-year currency swap arrangement “shortly”, which would allow it to supply yuan in exchange for other currencies if there were a sudden shortage in the London market.
The yuan is not fully convertible, meaning there are rules and regulations making the process of conversion more cumbersome. That can hinder trade as investors are nervous that there will not be enough yuan available if needed urgently for a deal.
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