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Regional treasury centres key driver of yuan adoption in Singapore: Analysts

Analysts say the presence and growing number of regional treasury centres in Singapore is a key driver of yuan adoption in Singapore.

SINGAPORE: Singapore has been growing as an offshore yuan centre, recently surpassing London to become number two globally, after Hong Kong.

In an addenda to President Tony Tan Keng Yam's address, the Monetary Authority of Singapore has reiterated its commitment to developing Singapore as an offshore yuan hub.

Analysts say that the presence and growing number of regional treasury centres in Singapore is a key driver of yuan adoption in Singapore.

Data released last month by global transaction services organisation SWIFT showed that Singapore accounts for 6.8 per cent of all offshore renminbi-denominated currency payments, compared with 5.9 per cent for London, and 72 per cent for Hong Kong.

Offshore yuan in Singapore is primarily used for cash management purposes by corporations, as well as companies who do business and trade with Chinese firms.

Singapore received its first offshore yuan clearing facility last May, and this has helped yuan deposits in the country hit 200 billion yuan as of end December.

"Over the last four to five years, we find the accelerator in Singapore would be regional treasury centres. There are far more regional treasury centres in Singapore taking care of not only ASEAN, but the entire Asia Pacific, and in some instances, they have a remit beyond Asia Pacific as well, to include some of South Asia," said Global Head of the Global Corporates Group at Standard Chartered Bank Neil Daswani. 

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