"Simply being reactive when offering renminbi products to clients is not enough"
Agnes Vargas, regional head, Greater China & ASEAN, Commerzbank explains how formulating a Rmb strategy is critical for banks trying to capitalise on the currency’s burgeoning popularity.
Transformation of the renminbi in recent years has rendered the Chinese currency almost unrecognisable since its internationalisation in 2009. Having now advanced to eighth place in the world’s most traded currencies (climbing from 20th, 17th and 11th places in 2007, 2010 and 2012 respectively), it seems likely that the renminbi will become a top three trading currency as early as 2015.
Despite this evolution, the Chinese government continues to restrict how the currency is used – an omnipresence that arrests its progress as a truly global currency. While its future as a world currency (along with the US dollar and the Euro) seems certain, its role as a reserve currency will be postponed until the Chinese state releases its grip on the use, exchange and transferability of the renminbi.
In this respect, the early signs are positive. Already, the renminbi has become convertible under the current account – making it a trading currency. The borders of mainland China have become more porous with regards to cross-border capital account transactions.
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Categories: Cash, Treasury & Trade
, Transaction Banking
Keywords: Agnes Vargas
, Marcus Lenz