China's plans to mainstream renminbi on track - HSBC
This means an increasing number of trade partners in China will demand payment in renminbi, rather than US dollars, as the year progresses, HSBC is warning.
Hot Topic
Summer features
An increasing number of trade partners in China will demand payment in renminbi, rather than US dollars, as the year progresses, HSBC is warning.
The bank – which offers renminbi services so has an interest in encouraging Kiwi importers and exports to trade in that currency - says recent announcements from the People’s Bank of China (PBOC) that it is upgrading its payments systems to make it easier to clear renminbi across its borders, suggests yet another move towards the internationalisation of the country's official currency.
“This is one of the strongest indications we’ve seen for a while that China is forging ahead with plans to internationalise the RMB. New Zealand importers and exporters need to ensure they are geared up for making and receiving international payments using RMB, as we are likely to see more and more trade partners demanding payments in RMB as 2012 progresses,” Cath Henry, head of global payments and cash management, at HSBC New Zealand says.
Traditionally, international trade deals with Chinese clients had to be transacted in foreign currency – usually US dollars.
“It appears that there is a surprisingly high level of buy-in for the internationalisation of the RMB in China, with critics of the process very much in the minority. Even with negative developments in the global and domestic macroeconomic environment, there appears to be minimal risk of a roll back of the internationalisation of the RMB – however, this could slow, rather than halt, if the Eurozone situation got much worse,” she says.
Ms Henry says this is despite the fact that there have been fading expectations for the RMB’s appreciation – which ended the year at 4.7%, slightly below traders’ expectations of 5%.
In October, BNZ became the third bank in New Zealand - the others being HSBC and ANZ - to in give customers the option to convert payments and receipts between RMB and New Zealand dollars directly and open a RMB foreign currency account with the bank.
China is New Zealand’s second largest trading partner with trading volumes of more than $11 (© Copyright Protected - The National Business Review 18)billion for the last year.
NBR staff
Thu, 12 Jan 2012
Thu, 12 Jan 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
China's plans to mainstream renminbi on track - HSBC
18427