Deutsche Bank announced that it has completed the first Singapore Dollar/Offshore Renminbi (SGD/RMB) spot trade to be cleared in Singapore, following the Monetary Authority of Singapore’s announcement that Renminbi (RMB) clearing in Singapore will be live as of May 27, 2013. The trade was executed on behalf of a Singapore-based commodities company.
In addition, Deutsche Bank has begun live pricing for offshore Renminbi versus local currency pairs across all of its onshore Asian locations (Hong Kong Dollar, Indian Rupee, Indonesian Rupiah, Korean Won, Malaysian Ringgit, Philippine Peso, Singapore Dollar, Taiwan Dollar, Thai Baht, etc.), and is the first bank in the market providing this comprehensive level of liquidity.
“Roughly 30% of China’s total trade volume is conducted with Asia Ex Japan," says David Lynne, Deutsche Bank Head of Fixed Income & Currencies and Commodities, Asia. "Direct local currency/RMB pricing will help encourage increased RMB-denominated trade settlement by facilitating corporate hedging of RMB exposure, unlocking yet more potential for the continued globalisation of the RMB.”
Live clearing in Singapore represents a major milestone in the development of the Renminbi as Singapore is widely expected to serve as a gateway for the usage of RMB in Southeast Asia, as the primary financial, commodities, and currency trading hub for the region.
China is the largest trading partner to ASEAN, and China’s imports from ASEAN nations have grown by almost 70% in the last five years, significantly outpacing growth of imports from the rest of the world.
“As trade flows between China and Southeast Asia continue to grow, it is natural that more companies will consider using the RMB as their currency of choice for bilateral trade," adds Deutsche Bank’s Asia Pacific Head of Global Transaction Banking Lisa Robins.
The bank claims it was the first to allow electronic execution of RMB trading via its online trading platform Autobahn FX, currently offering live 24x5 CNH pricing. Deutsche Bank also launched the first investable CNH bond index, and was among the first to execute onshore RMB FX option trades, CNH cross-currency swaps, and CNH forwards.
Deutsche Bank’s dedicated CNH trading desk manages a significant amount of daily trading volumes, while regular, dedicated research (Deutsche Bank’s CNH Market Monitor and China Market Perspectives) serves to keep investors and corporates informed on the latest developments and trends shaping the market.