BEIJING, Nov. 10 -- The People's Bank of China (PBoC), China's central bank, announced on Monday that it has inked a Memorandum of Understanding (MoU) on renminbi clearing with the central bank of Malaysia.

PBoC said in a statement that the MoU with Bank Negara Malaysia, the central bank, was signed in the Malaysian capital Kuala Lumpur.

Following the MoU, the PBoC will soon designate a renminbi clearing bank in Kuala Lumpur, the statement said.

The MoU is the first step toward the creation of a renminbi clearing and settlement infrastructure in the Malaysian capital.

Renminbi business infrastructure, once established, will facilitate renminbi-denominated cross-border transactions for companies and financial institutions in the two countries and boost bilateral trade and investment, PBoC said.

Malaysia, China's largest trade partner in Southeast Asia, has been active in promoting the use of renminbi in cross-border trade and investment.