The international bank Standard Chartered has tapped into the liberalization of China’s currency, the Renminbi (RMB) by opening its first onshore RMB trading account in Africa for South African metals trader, Portland Steel.
Given that trade between Africa and China exceeded $110 billion in 2010, up from $91billion in 2009, Standard Chartered says that the ability to offer onshore Chinese Yuan accounts to African corporates will give these companies the edge they need to facilitate fast and effective trade relations with Chinese suppliers, buyers and related global customers.
China is an increasingly influential trading partner for us, and the ability to exchange funds with both buyers and suppliers via an onshore RMB account will underpin successful trade relations,” says Roy Grayman, Portland Steels joint CEO. “Opening a Chinese currency (RMB) account with Standard Chartered has given us a competitive advantage, effectively enabling us to quote, sell and settle in RMB. Immediate access to RMB also increases our operational efficiencies by mitigating foreign exchange risks and reducing trade settlement costs associated with converting payments and settlements into USD.
Offering onshore RMB accounts to African corporates is in line with the Banks international ambition to lead the way in the development of Chinas currency market. One year after the Banks landmark role in the first domestic RMB cross-border trade settlement transaction outside of China.
Previously, Standard Chartered has structured a number of notable deals from the liberalization of the Chinese currency.
In Korea, Standard Chartered First Bank was the first bank to facilitate a cross-border RMB trade settlement between Korea and China while Standard Chartered was the first foreign bank to open an RMB nostro account for Islamic bank, Alinma Bank Saudi Arabia. Standard Chartered has since been mandated to open RMB nostro accounts for another 16 banks in the region.
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In Hong Kong, Standard Chartered closed the industrys first ever RMB bond issuance for American fast food giant, McDonalds, in August 2010. This was followed by a number of other notable RMB bond deals, including China Power, Agricultural Bank of China and China Development Bank. Standard Chartered Hong Kong also led this years first offshore Chinese Yuan bond issue for Bank of Communication, valued at RMB1 billion.
While still in Asia, Standard Chartered was the first international bank to facilitate two-way RMB denominated trade between Hong Kong & China