Citibank (China) Co. has completed its first cross-border lending transaction in renminbi.
According to the bank, the deal was conducted on behalf of a European food company, and is structured to optimise the company’s treasury activities by leveraging its China operation’s surplus cash.
The lending to the company's group treasury centre in Singapore is a critical step to expand and include renminbi into its treasury management currency basket, says Citibank.
"This creates a new treasury solution which will help our clients to connect China with their regional and global treasury centres and achieve greater efficiency in their global fund usage and allocation," says Yigen Pei, country head of Citi Transaction Services for China. "This will also signify important progress of renminbi internationalisation by establishing a bigger role for the currency in multinationals’ treasury management globally.”
The People’s Bank of China first introduced the renminbi cross-border initiative in July 2009 to provide companies with greater foreign exchange savings and operational efficiencies as well as to promote the internationalisation process of the Chinese currency.
In November 2012, the Shanghai branch of China Construction Bank Corp conducted the first yuan-denominated cross-border lending transaction, which was valued at 150 million yuan ($23.88 million). The funds were lent by the Chinese subsidiary of the United States-based General Electric Co to its parent company.