Westpac has announced its position as a “foundational bank” to Australasia’s first renminbi hub in Sydney.

Westpac has announced its position as a “foundational bank” to Australasia’s first renminbi hub in Sydney following getting clearance for this status from the People’s Bank of China and the Reserve Bank of Australia in Canberra, the nations’ two central banks.

The move was heralded on the same day – as reported elsewhere by this news service – that China took another step in raising its economic game by linking the Shanghai and Hong Kong equity markets.

Hailing the move, which happened as Australia inked what the international media called a “major” free trade deal with China, Wespac group chief executive Gail Kelly said: “The ability to settle transactions in RMB in real time through Sydney will make it faster and easier for customers to trade and transact in RMB. As a result of this development, the currency can move freely throughout our region to open up more of China’s economic opportunities for our customers across Asia, Australia and New Zealand.”

The economic rationale for Australia to sign up to such deals is clear: China is already Australia’s largest export market, accounting for A$102 billion ($88.9 billion), or more than a third of all Australian exports in 2013. The RMB is the second most used currency in trade finance, but at present few Australian businesses actually invoice and settle trades in the Chinese currency, Westpac said.