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Foreign Central Banks Allowed to Open Yuan Settlement Accounts in China

The General Office of the People's Bank of China (PBOC) issued a notice on 2 November on matters relating to foreign central banks and similar institutions opening Renminbi settlement accounts at mainland banking financial institutions. The foreign central banks and similar institutions mentioned in this notice cover foreign central banks, monetary authorities, other official reserve management agencies, international financial organisations, and sovereign wealth funds.

The notice clearly states that foreign central banks and similar institutions may open special deposit accounts at mainland banking financial institutions for bilateral local currency swaps, investment in China's inter-bank bond market, daily fund management and conducting other related businesses in accordance with law. Cash may not be drawn from this account and approval must be sought from the PBOC if cash indeed needs to be drawn.

Foreign central banks and similar institutions must present the signature page of the bilateral local currency swap agreement they signed with the PBOC, the recordation for investing in China's inter-bank bond market, or the official reply from the departments concerned for capital transactions in related businesses when applying to open special deposit accounts. Foreign central banks and similar institutions that have not yet obtained these documents may present their account opening recordation when applying for the opening of such accounts. 

Mainland banking financial institutions are required to promptly, accurately and fully report to the Cross-Border Renminbi Receipt and Payment Information Management System information relating to these accounts and their cross-border Renminbi receipts and payments.

The central bank stated that information regarding the special deposit accounts opened by foreign central banks and similar institutions at mainland banking financial institutions will not be included in the Renminbi Bank Settlement Accounts Management System for the time being.

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