The South African Reserve Bank (SARB) and the People’s Bank of China (PBoC) have signed a Memorandum of Understanding (MoU) for the purposes of clearing and settlement of renminbi in South Africa.
Both central banks agreed to coordinate and cooperate on the supervision, oversight and clearing of renminbi in South Africa and also to exchange information in order to facilitate the continuous improvement and development of bi-lateral trade.
China has become South Africa’s largest export partner and consequently, renminbi clearing in South Africa will be immensely valuable as corporates will benefit greatly from trading and settling in renminbi.
Opening a clearing centre in South Africa should boost trading in the rand/renminbi, which could make it easier and cheaper to trade in goods and services with China.