Sydney becomes the latest renminbi hub

The People's Bank of China has agreed to a deal with the Reserve Bank of Australia that will see Sydney, Australia's largest city, become the latest hub for trading in the Chinese currency.

The two central banks signed a memorandum of understanding on Monday, agreeing to extend the Renminbi Qualified Foreign Institutional Investor program to Australia with an initial investment quota of 50 billion yuan ($8.16 billion). It is expected that a Sydney clearing bank for yuan will be appointed soon.

"Such arrangements signify that financial cooperation between China and Australia has taken a new step forward. It will benefit companies and financial institutions from both countries in terms of using the yuan in cross-border transactions, promoting bilateral trade and facilitating investment," said the PBOC in a statement posted on its website.