CANADA expects to finalize the creation of a yuan clearing hub in the country, sources familiar with the government’s talks with Chinese officials said Tuesday, with an announcement expected during Prime Minister Stephen Harper’s trip to China later this week.

    The two sides “expect to be able to finalize and announce the currency hub,” said one source, speaking on condition of anonymity because the matter is not yet public.

    The move falls in line with China’s ambition to promote its currency to more international investors and eventually turn the “redback” into a global reserve currency.

    Earlier Tuesday, Qatar became the Middle East’s first hub for clearing transactions in yuan in a step that could help oil exporting countries in the Middle East reduce their dependence on the U.S. dollar.

    Industrial and Commercial Bank of China’s Doha branch has been appointed as the clearing bank for yuan deals in Qatar, China’s central bank said Tuesday.

    China has in the past two years appointed clearing banks for Singapore, London, Frankfurt, Paris, Luxembourg and Seoul. Hong Kong and Macao had clearing banks earlier. Sydney is expected to join the list later this month.

    In Canada, Toronto and Vancouver have been jostling to host the clearing hub, but a second source familiar with the matter said Toronto has edged past its West Coast rival in the race.

    A clearing bank can handle all parts of a transaction from when a commitment is made until the deal is settled. Having such a bank can reduce costs and the amount of time taken for trading, boosting activity in a financial center.

    The Canadian Chamber of Commerce has publicly endorsed the establishment of a yuan hub in Canada as a crucial step toward strengthening the country’s relationship with China and boosting trade. (SD-Agencies)