FX news: Renminbi comes to Africa
The small steps towards yuan convertibility continue this week with Standard Bank’s move to offer settlement in the Chinese currency.
Standard Bank clients may now open renminbi accounts in South Africa for settlement of import and export trades with enterprises in China in designated provinces and cities.
Craig Bond, chief executive of Standard Bank in China, says: “Clearly, trade with China and Africa has seen massive growth in the last decade, and Standard Bank – with its African roots – is uniquely placed to assist in the two-way trade flows between China and Africa. The ability of Standard Bank customers to settle in RMB has been made possible through Standard Bank’s strategic alliance with the Industrial and Commercial Bank of China, and now enables Standard Bank clients to mitigate their exposure to the US dollar or other foreign currencies.
“Customers involved in cross-border trade with China will be able to denominate their transactions with China in RMB, reducing risk for the importer/exporter and thereby potentially improving the competitiveness and stability of pricing.”
In nominal terms, Africa’s trade with China has doubled every three years since 2000. Trade with China currently accounts for more than two-thirds of Africa’s trade with the so-called Bric countries.