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‘S’pore has bright future’ as renminbi hub

SINGAPORE — As usage of the renminbi (RMB) continues to gain traction internationally, Singapore — as the largest offshore RMB clearing centre outside Greater China — will continue to position itself to support and tap the internationalisation of the Chinese currency, Minister of State (Trade and Industry) Teo Ser Luck signalled yesterday.

SINGAPORE — As usage of the renminbi (RMB) continues to gain traction internationally, Singapore — as the largest offshore RMB clearing centre outside Greater China — will continue to position itself to support and tap the internationalisation of the Chinese currency, Minister of State (Trade and Industry) Teo Ser Luck signalled yesterday.

Speaking at the first RMB Internationalisation Summit here yesterday, Mr Teo said Singapore has developed strong capabilities to support the use of RMB for trade settlement, financing and investment.

“As Singapore continues to expand into new areas of economic and financial cooperation with China, and as the RMB gains further momentum in global usage, I believe there is great opportunity for Singapore as a major offshore RMB centre.”

The summit was organised by the Singapore branch of the Industrial and Commercial Bank of China (ICBC Singapore), the only RMB clearing bank here.

It began RMB clearing services in May last year and has cleared more than 20 trillion yuan (S$4.13 trillion) worth of transactions to date.

ICBC chairman Jiang Jianqing, who was also present at the summit, said Singapore’s pool of RMB deposits has grown to about 254 billion yuan (S$52.5 billion) as of the end of June, up from only 60 billion yuan (S$12.4 billion) two years ago.

Noting that the establishment of the ASEAN Economic Community next year will create a single market with free movement of goods, services and investment, Mr Teo said: ”Chinese companies can further leverage on Singapore as a base for capital flow for their operations in this region.

“Not only will they benefit from these financial initiatives, they can also bank on our reliable support infrastructure and strong regional linkages to jump-start their internationalisation efforts.”

Beyond financing and clearing activities, Singapore has also been working to establish a vibrant capital market, through, for instance, Lion City bonds, Mr Teo said.

At a panel discussion yesterday, Mr Leong Sing Chiong, an assistant managing director at the Monetary Authority of Singapore, elaborated on Singapore’s role as China looks to fully internationalise the usage of RMB.

“The building up of RMB has catered to the needs of traders based here. Going forward, we want to extend to cover capital markets. We will be in a good position to ride on the growth in the next five to 10 years.”

Another panellist, Mr Lawrence Wong, executive vice-president and head of listings at the Singapore Exchange (SGX), was queried on coming plans for more RMB products. He signalled that the Republic has been relatively active in this area, with RMB trading and listings introduced even before the clearing centre was set up.

Mr Wong also highlighted that the SGX last week launched RMB futures contracts, which will begin trading next month.

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