The US fund houses operate from Singapore will now have access to the $250bn yuan (S$51.6bn) quota awarded for American investors which will bolster the yuan hub activity in the City, experts said.

US now stands second behind behind Hong Kong which has a quota of $270bn yuan after China announced its plan to include US in the network of foreign investors who can access Chinese stocks and bonds.

Singapore had joined the Renminbi Qualified Foreign Institutional Investment (RQFII) scheme three years ago, which started in 2011, and has a fund quota of $100bn yuan.

The RQFII scheme aims to speed up the yuan liberalisation programme as it will increase foreign investors' access to China's financial markets and helps push for wider use of the yuan.

Analysts said that the US Fund houses stationed in Singapore will now have more financial headroom and their proximity to China will be an added advantage.

Another point is that the Singapore economy is directly correlated to global major economies, especially to the US and China, so the City will only benefit from increased business activity between them.

The demand for the Chinese currency is likely to increase when it gets easier for US companies and investors to transact in yuan, analysts said.