China's ICBC becomes Singapore yuan clearing bank

China's central bank on Tuesday signed an agreement with the country's largest lender, ICBC, to authorize the bank's Singapore branch as the clearing bank of renminbi (RMB) business in Singapore, a move that will further boost the yuan's global presence.

The People's Bank of China (PBOC), or the central bank, on Tuesday also signed a cooperation memorandum on RMB business in Singapore with the Monetary Authority of Singapore.

"The signing of the two documents will help Chinese and Singaporean enterprises and financial institutions to use renminbi for cross-border transactions and further facilitate the liberalization and convenience of trade and investment," the PBOC said in a statement on its website.

According to the agreement signed by the PBOC and the Industrial and Commercial Bank of China's (ICBC) Singapore branch, financial institutions in Singapore and China can engage in cross-border yuan clearing business through the ICBC's Singapore branch, apart from agent banks.

Singapore and other major financial centers like Taiwan and London are competing with each other to capitalize on the rapid growth of the offshore yuan-denominated trades and financial products, a field dominated by Hong Kong.