London Metal Exchange CEO Matt Chamberlain on Tuesday pledged to support the use of the yuan amid calls for the bourse to allow trades to be executed in the Chinese currency.
The LME's contracts are denominated in dollars, but trades can also be cleared in euros, yen and pounds sterling. The yuan, also known as the renminbi, can currently only be used for cash collateral to cover margin requirements on the LME, even though China, the world's top metals consumer, is key to liquidity.
"Given the number of Chinese players active on our market, we want to support their use of renminbi just like we support other currencies such as the US dollar, the euro, the Japanese yen, and even pound sterling," Chamberlain told the China Nonferrous Metals Forum, held on the sidelines of LME Week.
The exchange's "RMB project" will not only help the LME but also London as a centre for offshore yuan, which will boost the British capital's economy, he added, stopping short of saying metal trades in yuan could be on the way.
LME member Sucden Financial earlier this month called for brokers to be allowed to execute trades in offshore yuan, while the CEO of LME owner Hong Kong Exchanges and Clearing (0388) on Monday said HKEX was looking at rolling out more yuan-denominated products.
Reuters
