British and Chinese officials greet the launch of China's sovereign offshore RMB bond in London in June, 2016. (File photo: China Daily)

London (People’s Daily) - Record amounts of Chinese currency are being traded daily in UK, which consolidates London’s dominance in the yuan offshore market, according to a report published on Monday.

The 5th edition of the London RMB Business Quarterly, produced by the City of London Corporation in partnership with the People's Bank of China, reveals an average of £85 billion (about $109.4 billion) of the Chinese currency was traded on a daily basis in the second quarter of 2019, up nearly 10 percent on quarter one and over 20 percent higher year-on-year. 

Additional data in the report points to another record-breaking year for growth of the yuan in the UK. Between June to August 2019, the average daily clearing volume by the UK designed RMB clearing bank, China Construction Bank London Branch, hit 43.97 billion yuan ($6.27 billion), up 18.4 percent from the last report in August and helping the bank clear 40 trillion yuan since the process began in June 2014. 

RMB cross-border settlement volumes also saw a sharp rise. By the end of August 2019, payments and receipts touched 370 billion yuan, matching the total volume for the whole of 2018. 

The industry update in this edition of the report also explores yuan-denominated bonds as eligible collateral accepted by the UK market, an important policy outcome of the 10th UK-China Economic and Financial Dialogue. This development may help relieve the shortage of high-quality liquid assets in the UK market, strengthen the status of London as an offshore yuan hub, and facilitate the opening up of China’s bond market as well as the internationalization of the yuan.

Catherine McGuinness, policy chair at the City of London Corporation, said, “It’s no secret that the UK has long been a world-leader in foreign exchange. Naturally we’ve also grown to become the leading hub for RMB trading, with levels of the Chinese currency going through London far outstripping that of any other financial center. I look forward to seeing this trend continue long into the future.”

The London RMB Business Quarterly was launched in September 2018. Backed by UK Treasury, its publication marked a continuation of the City Corporation’s influential RMB business initiative, a campaign which ran from 2012 to 2015 that helped London become the leading offshore RMB trading hub outside of Asia.