- POSTED: 20 Sep 2013 20:58
This graph is an experimental feature that tracks number of views over time.
Renminbi (RMB) deposits in Singapore have grown by 40 per cent since the end of last year, according to the Monetary Authority of Singapore.
SINGAPORE: The use of renminbi (RMB) has gained traction in Singapore since the launch of RMB clearing arrangements this year.
The Monetary Authority of Singapore (MAS) says RMB deposits in Singapore have grown by 40 per cent since the end of last year.
Total RMB deposits in Singapore amounted to 140 billion yuan at the end of July and industry players say prospects for the currency is bright.
The Singapore Exchange (SGX) and Bank of China signed a memorandum of understanding on Friday morning to grow China's markets.
The Bank of China will be SGX's first Chinese settlement bank.
Both parties will also cooperate to develop RMB products and services, and the Bank of China will look into increasing its role in SGX's markets.
CEO of Singapore Exchange Magnus Bocker said: "Growing the distribution of SGX products in China (is) something we so well need and it's important for the financial markets. This will no doubt meet the current needs of our customers, because they have a great interest for more China-related products and services."
The local units of the Bank of China, together with the Industrial and Commercial Bank of China (ICBC) were both granted qualifying full bank licenses in Singapore in 2012.
The Singapore branch of ICBC was later appointed by the People's Bank of China as the RMB clearing bank in Singapore this year.
Singapore's central bank also sees more opportunities for the city-state to support regional companies in their RMB financing needs.
Assistant Managing Director (Development & International) at MAS Leong Sing Chiong, said: “Singapore's deep and liquid capital markets will be able to support RMB financing needs in the region. We can expect to see more RMB-denominated financing transactions here as regional corporates raise funds through bond and equity issuances to tap on the strong investor base in Singapore.”
IE Singapore also noted that the internationalisation of the Chinese currency in Singapore can help develop its ability to facilitate large volumes of business and trading activities.
This includes increased access to RMB liquidity, potential pricing discounts for transactions with Chinese corporates, lower foreign exchange risks and costs.
The Bank of China noted that recent volatility in the foreign exchange market has put the Chinese currency in a positive light.
Chairman of Bank of China Tian Guoli said: "As a market participant, we all wish that exchange rate risk can be hedged to the fullest extent so as to lower currency exchange cost, increase fund turnover, and preserve the inherent values of the currencies we hold. On this front, RMB provides us with a new option."
Bank of China also launched the BOC Cross-border RMB Index on Friday, which tracks the level of RMB activity in cross-border and overseas transactions.