The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

A Singapore CNY hub would benefit China’s FX reserves

The South-east Asia city state could well become the next hub for offshore renminbi trade settlement, a move that would help ease China’s FX reserve burden. However, Beijing still needs to see more onshore exporters trading in renminbi.

This article appears courtesy of Asiamoney, sign up for a free trial on their site

Opening up Singapore as another offshore renminbi trade centre should ease China’s foreign exchange (FX) reserves problem, strategist in the region agree. The thoughts comes as news emerges China will soon appoint a Chinese bank to settle renminbi in Singapore.

The Peoples’ Bank of China (PBoC) will soon pick an approved Chinese bank to clear renminbi trades in Singapore, Goh Chok Tong, chairman of the Monetary Authority of Singapore, told the Singapore Business Times today (April 18).

At present, the only offshore hub where this can happen is in Hong Kong. Having a clearing bank domiciled in a country gives the local banks the ability to accrue greater reserves of renminbi and provides a wider avenue for renminbi to be traded.

The timing of the news in Singapore makes a lot of sense. On April 18, Zhou Xiaochuan, central bank governor for the PBoC, said the country was in need of reducing and diversifying its vast FX reserve holdings, which have risen by a further US$200 billion during March to hit US$3 billion.

This vast amount of money—which is still rising—has built as a consequence of the PBoC buying up most of the US dollars flooding into China at a set rate.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree