From the AFR:
Sydney’s status as the next official yuan trading hub could help Australia tap the vast pool of Chinese savings to fund infrastructure.
Prime Minister Tony Abbott, who has badged himself the infrastructure leader, is close to securing agreement on a trading hub that his Treasury has been negotiating for six months.
“It is the missing piece of financial architecture which will allow Australia to participate in the rise of the yuan,” said David Olsson, the deputy chairman of an industry steering committee convened by the Treasury.
Under the deal, a Chinese bank in Sydney would be designated an official clearing house for the yuan, backed by the imprimatur of the central bank, The People’s Bank of China.
While banks such as ANZ can clear yuan trades, being an official trading hub would allow an emergency injection of liquidity if the markets seize up.
London, Paris, Moscow, Singapore and Tokyo already have hub status and a bunch of other cities are vying for more. The RBA already has swap lines with the PBOC so I’m not sure this is such a big deal. But correct me if i’m wrong!
