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China sets yuan-clearing bank in Seoul

China designated a clearing bank in Seoul for yuan transactions in South Korea on Friday, coinciding with a visit by President Xi Jinping, as Beijing promotes greater use of its currency overseas.

SHANGHAI: China designated a clearing bank in Seoul for yuan transactions in South Korea on Friday, coinciding with a visit by President Xi Jinping, as Beijing promotes greater use of its currency overseas.

China's central bank has authorised the Bank of Communications, the country's fifth largest lender, to undertake yuan clearing business in the South Korean capital, the People's Bank of China (PBoC) said in a statement.

The announcement came as Chinese President Xi Jinping wrapped up a state visit to South Korea on Friday.

China is seeking to make the yuan -- also known as the renminbi -- used more internationally in keeping with the country's status as the world's second biggest economy behind the United States.

A joint communique endorsed Thursday by Xi and his South Korean counterpart Park Geun-Hye also pledged to strengthen efforts to launch direct trading between the yuan and the won.

The PBoC recently announced that it signed agreements for yuan clearing arrangements with France and Luxembourg, adding Chinese banks would be designated later as the clearing institutions.

Before that, it named the Bank of China as the clearing bank for yuan dealings in Frankfurt, Germany, and the China Construction Bank in London.

China will also appoint a clearing bank in Sydney, a top Australian official has said.

China keeps a tight grip on the value of its currency and limits capital flows into and out of the country on fears it could disrupt the economy.

But authorities have made efforts to further liberalise the movements of its currency and create a more market-oriented exchange rate.

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