The governor of Australia’s central bank took a break from domestic monetary policy on Monday to share some thoughts on the internationalisation of the Chinese currency. Speaking at the launch of the Bank of China in Sydney as the official renminbi clearing bank in Australia, Glenn Stevens said that in the long run “Chinese firms may increasingly wish their trade with Australian firms to be settled in RMB.”
The march of the renminbi towards internationalisation has been a theme for some time now but it is particularly important for Australia, as Asia’s largest economy is a vital market for its commodities exports – primarily coal and iron ore.
The RBA has already tried to facilitate business’ use of the Chinese currency. It established a bilateral local currency swap line with the People’s Bank of China in 2012 and also allows some Australia-based financial institutions to invest in approved mainland Chinese securities under the ‘Renminbi Qualified Foreign Institutional Investor Scheme’.