Making the off-shore renminbi work for your institution
Teleconsultation session on cross-border settlement in renminbi shows benefits of the transactions and also reveal issues which have to be resolved before other off-shore centres can be established. June 21, 2011 | Timothy ShimChina’s push to internationalise the renminbi has sparked hot debate across the globe in recent years, but how exactly do you make the off-shore renminbi work for you? The recent Asian Banker teleconsultation session on this topic takes a look at the developments in the liberalisation of the renminbi with experts speaking from a regulation point of view, as well as from business owners’ point of view. Kuresh Sarjan, head of Asia trade and supply chain finance for Bank of America Merrill Lynch gave an overview of renminbi cross-border settlements, as well as illustrated how it has evolved and what benefits it can give you. He also highlighted current common structures in trade settlement. He said that in July 2009 a pilot scheme was launched in five cities in mainland China, with Mainland Designated Enterprises (MDEs) eligible to participate, along with corporations in HK, Macau and ASEAN countries. By June that year, the renminbi trade settlement scheme had expanded to cover 20 provinces and cities in mainland China, and trade transactions between eligible enterprises in mainland China and corporations in any other part of the world could be settled in renminbi. By July 2010, People’s Bank of China (PBOC) and the Hong Kong Monetary Authority (HKMA) had signed a supplementary memorandum of co-operation on the expansion of the renminbi trade settlement scheme, agreeing to further cooperate in the development of the offshore RMB trade settlement business. In October 2010, ADB and IFC of the World Bank Group announced issuance of renminbi bonds in Hong Kong, and by December, the list of eligible MDEs under the cross-border renminbi trade settlement scheme had expanded even further. Kuresh explained that for global companies conducting cross border trade with mainland China enterprises, the benefits are multiple. You have competitive differentiation, the ability to sell in renminbi and expand your customer base, as well as gain... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: China, Payments, Rmb, Transaction BankingChina,Payments,Rmb,Transaction Banking, China,Payments,Rmb,Transaction Banking, Keywords:BofA, Trade Settlement BofA, trade settlement
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