(28 May 2013 – Singapore) From Monday ICBC Singapore has started clearing renminbi (RMB) denominations.
Live clearing in Singapore is a major milestone in the development of the RMB as Singapore is widely expected to serve as a gateway for the use of RMB in Southeast Asia.
Singapore is the primary financial, commodities, and currency trading hub in the region.
Analysts believe the ICBC Singapore move could divert some RMB flows from Hong Kong because the Bank of China (Hong Kong) competition.
Users of RMB will look for a participating bank that can meet their demands, rather than just having a clearing bank nearby. Analysts believe the use of the RMB will increasingly become part of day-to-day business for anyone trading with or investing in China.
With the availability of competitive RMB clearing, the increase in volume of renminbi -denominated trades through Singapore should increase the overall pool of RMB liquidity outside China, which will in turn accelerate the development of new offshore RMB products and services.