Britain and Singapore have agreed to deepen financial and economic ties by setting up a Financial Dialogue.

This dialogue will form the basis for a regular exchange of views between the two countries on domestic and international financial issues.

It will be led by the Britain's HM Treasury and the Monetary Authority of Singapore.

The agreement was struck in Singapore on Tuesday between the Chancellor of the Exchequer, Mr George Osborne, and Singapore's Deputy Prime Minister, Mr Tharman Shanmugaratnam.

This is Mr Osborne's first trip here.

The ministers also agreed to support the establishment of a new, private sector forum to boost the development of the offshore yuan, or renminbi (RMB) market.

The forum will be led by the private sector and focus on increasing cooperation between the United Kingdom and Singapore markets.

London and Singapore are two of the world's leading international financial centres and play similar roles as financial hubs and major asset management centres for Europe and Asia respectively.

They are also the largest and third largest foreign exchange centres in the world respectively.

Mr Osborne said: "I am delighted to be able to announce the new UK-Singapore Financial Dialogue. The UK and Singapore are both leading financial centres. Sharing our knowledge and expertise will open up new opportunities for both of our economies and help the UK succeed in the global race."

Mr Tharman added: "The UK-Singapore Financial Dialogue reflects our common interests in promoting a stable and vibrant international financial system, and will help strengthen what is already a solid base of economic and financial cooperation.

"The new private sector forum will also help advance cooperation as we each play our role in developing the offshore renminbi market."