Beijing: China`s central bank has approved Bank of China, one of the country`s major financial institutions, as the clearing bank for yuan transactions in Germany`s financial centre Frankfurt, it said Thursday.
The People`s Bank of China (PBoC), the central bank, made the announcement in a one sentence statement on its website.
The designation was based on a memorandum of understanding with the Deutsche Bundesbank, Germany`s central bank.
State-owned Bank of China is one of China`s so-called "big four" banks.
The announcement came a day after the PBoC announced that a subsidiary of China Construction Bank, the country`s second-largest lender, had been chosen to undertake yuan clearing business in London.
China on Thursday also started direct trade between the yuan, also known as the renminbi, and Britain`s pound, without using the US dollar as an intermediary.
Moves to internationalise the yuan have picked up pace in line with growth in China`s economy, with direct trading moving to more currencies.
But while China has been actively pushing the yuan`s greater use internationally and taken steps towards interest rate liberalisation, full convertibility is seen as being far away.