MANILA, Philippines - Deutsche Bank has completed the first Singapore dollar/offshore renminbi (SGD/RMB) spot trade which, in turn, will be made available to Asian firms in need of the Chinese currency for trade.
Deutsche Bank head of fixed income and currencies and commodities for Asia David Lynne said the Monetary Authority of Singapore (MAS) has cleared the trade.
It was executed on behalf of a Singapore-based commodities company.
In addition, Deutsche Bank has begun live pricing for offshore renminbi versus local currency pairs across all of its onshore Asian locations including the Thai baht, Hong Kong dollar, Indian rupee, Indonesian rupiah, Korean won, Malaysian ringgit, Philippine peso, Singapore dollar and Taiwan dollar.
Lynne said roughly 30 percent of China’s total trade is conducted with Asia, excluding Japan.
“Direct local currency to renminbi pricing will help encourage increased reminbi-denominated trade settlement by facilitating corporate hedging of the Chinese currency exposure, unlocking yet more potential for the continued globalization of the RMB,†he said in a statement.
Live clearing in Singapore represents a major milestone in the development of the renminbi as Singapore is widely expected to serve as a gateway for the usage of RMB in Southeast Asia, being the primary financial, commodities and currency trading hub for the region.
China is the largest trading partner of Asean. Its imports from Asean nations have grown almost 70 percent in the last five years, significantly outpacing growth of imports from the rest of the world.