BEIJING - China's central bank on Wednesday authorized the Bank of China (BOC) to serve as the clearing bank for renminbi business in South Africa.

Yuan clearing business will be carried out by the Johannesburg branch of BOC, the country's third largest commercial bank by market value, according to a statement from the People's Bank of China (PBOC), the country's central bank.

The PBOC made the decision in accordance with a memorandum of understanding (MOU) it signed Tuesday with its South African counterpart to set up a yuan clearing system in the country.

Both central banks agreed to cooperate on the supervision and clearing of yuan business in South Africa and to exchange information to improve bilateral trade.