WASHINGTON (BLOOMBERG) - The United States took an unprecedented step towards allowing trading and clearing of the Chinese yuan in America.
Finance and industry leaders said Monday they are setting up a group aimed at allowing US institutions to make or receive yuan payments, according to a press statement. The roadmap will be subject to review by US authorities, with the aim of lowering transactional costs and helping build stronger trade and business partnerships, they said.
This "will improve the competitiveness of US companies, increase market transparency and accrue direct benefits to the US economy," the group said.
Formation of the working group comes after US President Barack Obama and China's President Xi Jinping agreed in Washington in September to further strengthen the financial cooperation between the two nations. Michael Bloomberg, the founder and majority owner of Bloomberg LP and a former New York mayor, will chair the group and Mary Schapiro will serve as vice chair, while Thomas Donohue, Timothy Geithner and Henry Paulson will co-chair.
A string of financial centers have tried to set up yuan trading hubs outside China, a step that would help the world's second-biggest economy integrate further into global financial markets.
Monday's announcement came as the International Monetary Fund decides whether it will include the yuan in its Special Drawing Rights basket. The SDR, created in 1969, gives IMF member countries who hold it the right to obtain any of the currencies in the basket - currently the dollar, euro, yen and pound - to meet balance-of-payments needs.
Bloomberg LP is the parent of Bloomberg News.