Since Chinese authorities started developing the nation’s currency, the renminbi (RMB), as a currency of international trade, it has been growing in circulation on global markets. Although still fairly regulated, the renminbi is being promoted by the Chinese government as legal tender in deals with foreign companies and institutions.
While not considered a major currency in terms of volume at this time, the RMB’s projected growth as a currency of trade is considerable. As the currency’s global activity grows, it will have an enormous impact on the way we do business in Africa, since China is Africa’s largest trading partner.
The Standard Bank Group was one of the first financial institutions to recognise and focus on the growing relationship between Africa and Asia. Our relationship with Asia, and with China in particular, is underscored by our close ties with the Industrial and Commercial Bank of China, which holds a 20% stake in the Standard Bank Group.
As the largest banking group in Africa, we are well placed to provide payment clearing and trade settlements in the domiciled currency of Mainland China through a centralised solution designed to meet your requirements.
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To read more on Trade and payment solutions using Renminbi download the below brochure.
Download brochure - Benefits of using the Standard Bank Group's centralised RMB Capabilities.
Client value propositions
The Standard Bank Group provides a facility for financial institutions looking for RMB settlement solution for their clients in Africa. The facility can also be used to sell currency, hedge currency risks and provide leverage for short-term funding at low rates.
African importers and exporters
The Standard Bank Group allows African importers and exporters to settle Chinese trade deals directly in RMB, reducing foreign currency translation risk, aiding price negotiations, promoting price transparency and providing access to lower-cost funding.
Chinese importers and exporters
The Standard Bank Group’s direct RMB settling facility reduces the need for a pricing buffer against currency fluctuations, lessens the cost of international trade, reduces the need for hedging, and promotes the use of renminbi as a trade currency in line with the Chinese government’s national strategy.
The Standard Bank Group provides access to a range of RMB (onshore renminbi traded in Mainland China) investment assets such as foreign exchange, money market products, term deposits and bonds. The renminbi market is an attractive investment option both from an appreciation and diversification perspective.
Benefits of using the Standard Bank Group's centralised RMB solutions
- Payments and trade settlements can be initiated on existing channels in RMB, giving you the option of dealing with your Chinese partners in their native currency and aligning with
- China’s national promotion of the use of the renminbi
- Importers and exporters can settle trade transactions in Renminbi.
- RMB clearing through a centralised solution for cash management, payments, trade and client services
- Direct settlement in RMB reduces foreign currency translation risk
- Access to RMB loans helps to reduce the cost of funding by improving your working capital cycle and shortening your cash-conversion cycle
- Foreign currency revenue and cash flows are easier to manage
The diversification of FX exposure lessens the impact of USD exchange-rate fluctuations on your business
For more information on the renminbi service offering, contact your trade sales manager, or email [email protected].