China to set up yuan clearing bank in Sydney

China will designate a clearing bank in Sydney for overseas trading of its yuan currency, a top Australian official said Thursday as China seeks to make its currency more international.

The Australian financial capital would follow London and Frankfurt as a location for a Chinese bank to clear transactions in yuan, also known as the renminbi.

"I am confident that we will have, before the end of the year, a designated clearing bank for renminbi trading in Australia with the opportunity for an Australian bank to be a market maker," Australia's Treasurer Joe Hockey told the Australian Chamber of Commerce in Shanghai.

China announced this month that the Bank of China would be the clearing bank for yuan dealings in Frankfurt while China Construction Bank won the bid for London.

Chinese authorities keep a tight grip on the value of the yuan and limit capital flows into and out of the country.

But China - the world's second-largest economy - is gradually moving to implement financial reforms by making its exchange rate more flexible and opening its capital account for investment and financial transactions.

The yuan remained the seventh-most used currency for global payments in May, transaction services organization SWIFT (Society for Worldwide Interbank Financial Telecommunication) said Thursday, although it accounted for only 1.47 percent of the total.