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China Construction Bank wins approval to operate in Chile
[SANTIAGO] Chile's bank regulator said on Wednesday it had authorized China Construction Bank to begin operating in the country, a move that could boost the use of the yuan currency in Latin America.
The approval is the final step in a lengthy process the Beijing-based bank began in January 2014, and makes it the first clearing bank for the yuan in the region.
Last year, the People's Bank of China designated China Construction Bank as the official yuan clearing bank in Chile.
As part of that deal, the two nations agreed to a currency swap agreement that would facilitate the exchange of a maximum of 2.2 trillion pesos (S$4.43 billion) for three years.
It comes at a time when the Chinese government is actively looking to increase the yuan's use throughout Latin America.
Chile's top trade partner, China accounts for over 20 per cent of the South American nation's exports, mostly of copper but also wood pulp, wine, salmon, and other products.
However, Chinese investment to date has been considerably lower in Chile than in other Latin American countries such as Peru, and Chilean officials have said they are keen to address that.
The Chilean domestic banking market is currently led by Banco Santander-Chile and Banco de Chile.