I Get By With Alittle Help From My Friends....

Dinar Outcast

You are not connected. Please login or register

StanChart sees strong interest in yuan use

Go down  Message [Page 1 of 1]

1 StanChart sees strong interest in yuan use on Tue Aug 03, 2010 12:14 am


StanChart sees strong interest in yuan use
Mon Aug 2,2010

Standard Chartered Plc is seeing strong interest from its clients in using the yuan for trade settlement, a senior executive said on Monday, following Chinese moves to internationalize its currency.

There was also growing demand for yuan-denominated products in Hong Kong and the region, which would help the territory's yuan market reach the critical mass it needed to function, said Neil Daswani, the bank's North Asia transaction banking head.

"We're seeing strong interest across all client segments," Daswani said in an interview. "Although volumes are still very low, accounting for less than 1 percent of China's total trade, this will grow considerably."

China and Hong Kong agreed to loosen rules regulating trading of the yuan in the territory in July, tweaking rules to allow the sale of yuan-denominated financial products and giving companies greater access to yuan funds.

Much of the trade settlement business will come from companies looking to re-denominate to yuan away from the U.S. dollar, which most companies operating in China use to pay and issue invoices.

Allowing services to be paid for in yuan would also help expand the use of the currency by companies, Daswani said. Hang Seng Bank Ltd economists expect yuan settlements to hit about 100 billion yuan ($14.76 billion) by the end of the year, up from about 45 billion yuan currently.

Key to expanding the market is increasing two-way yuan transactions where companies receive and sell in the currency, as that would allow a natural hedge for companies looking to minimise foreign exchange risk exposure.

"It just doesn't make logical sense to have one of the world's largest economies doing so much business in another currency," said Daswani. "The market has responded very favourably and this will continue."

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum