LME Clear, the clearing house for the London Metal Exchange (LME), will now accept China’s offshore currency as eligible cash collateral, following regulatory approval from the Bank of England.
The approval will make LME Clear the first European clearing house to allow China’s offshore renminbi (CNH) currency as collateral, marking further integration between the London and Asian markets.
“The renminbi is on its way to becoming one of the world’s most widely used currencies, and we are pleased to be able to help our members take advantage of the opportunities arising from the renminbi’s internationalisation,” says Trevor Spanner, chief executive of LME Clear.
Chinese-owned BOCI Global Commodities will be the first LME Clear Member to submit CNH collateral.
“This is an important development for the LME and LME Clear, and it highlights the stronger ties and synergy between Hong Kong and London since the LME became part of the HKEx Group,” adds Charles Li, CEO of Hong Kong Exchanges and Clearing (HKEx), the LME’s parent company.