Renminbi (RMB) letters of credit (L/Cs) are becoming an increasingly common sight in London as the UK capital seeks to establish itself as a leading offshore centre for the Chinese currency.

Beijing meanwhile is planning to introduce yet more measures to encourage the use of the yuan in international markets, where demand for the Chinese currency appears to be growing strongly.

London growth

According to the chairman of the policy and resources committee of the City of London, Mark Boleat, London is seeing strong growth in trade-related RMB services provided by the city's banks.

The value of L/Cs seen by London's banks has reached a six-monthly average of 3.7 billion yuan (US$594 million), which is 20 times the six-monthly average value recorded in 2011.

Other trade finance related yuan services are also reported to be growing strongly in London.

Global demand

China meanwhile is expected to extend the range of RMB denominated investments open to foreign institutional investors and relax the rules governing global yuan investments by individuals.

Globally, cross-border settlement in yuan grew by 41.4 per cent in 2012, to 2.94 trillion yuan (US$472 billion) according to China's central bank.

Demand for the Chinese currency is expected to be particularly robust in the Asia-Pacific region.

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