Transaction settlement in RMB ‘will cut trade costs’
Jun 18, 2014-
An expert on global use of Renminbi (RMB) said on Tuesday the use of the Chinese currency for the settlement of business transactions would lower Nepal’s trade costs with China.
Amid growing trade between the two neighbours, Frankie Shu On Au, global head - RMB Products, Standard Chartered Bank, Hong Kong, said the use of RMB in export/import would minimise the cost of documentation.
According to the Trade and Export Promotion Centre, in the last fiscal year alone, exports to China surged more than double to Rs 2.17 billion, while imports grew 29 percent to Rs 68.30 billion. Currently, Nepali traders have been using the US dollar to settle business transactions with Chinese traders.
“As there will be no need to use the dollar as intermediary currency, the direct exchange rate of the currencies could help reduce the cost burden,” said Au, speaking at a programme organised by the Standard Chartered Bank Nepal here on Tuesday.
China, being the second largest economy of the world, is trying to internationalise its currency. The RMB is the seventh largest currency being used in the world.
According to Frankie, mainstreaming the RMB can be critical for business growth, trade and liquidity management. He said 20 percent of the global trade with China is done in RMB.
Published: 18-06-2014 10:57