The London Metal Exchange, the world’s biggest metals bourse, will accept the offshore yuan as collateral against its contracts after Bank of England approves it, the exchange said in a statement Tuesday.
LME Clear already accepts collateral denominated in dollars, pounds, euros and yen to cover trading margins, Bloomberg says.
The exchange noted that BOCI Global Commodities (U.K.) Ltd., one of the LME’s six Chinese-owned members, will be the first to submit collateral in the yuan.
Beijing is easing control of its currency, aiming at attracting foreign investment and increasing global use of the renminbi.
The world’s second-largest economy is broadening its presence in the gold and forex markets worldwide as it seeks to make the yuan a viable competitor for the dollar.
The moves by the LME, bought by Hong Kong Exchanges & Clearing
Ltd. for $2.2 billion in 2012, are part of a broader push to expand in
China.
The Asian nation accounts for about 70 percent of iron ore consumption, and over 40 percent of demand for such metals as copper, aluminum and nickel.
