Singapore has made a bid to become the first overseas hub for trading renminbi, marking a new stage in the internationalisation of the Chinese currency.
The Monetary Authority of Singapore said on Tuesday that Beijing would soon appoint a Chinese bank to clear renminbi trades in the city state, giving Singaporean banks direct access to renminbi rather than having to route transactions via Hong Kong or commercial banks in China.
“It’s a huge development,” said Mirza Baig, a Singapore-based currency strategist for Deutsche Bank. “Think of a clearing bank as a pipeline that flows between Singapore and mainland China. Singapore won’t need to go through Hong Kong any more.” About 7 per cent of China’s international trade was settled in renminbi in the first quarter of this year, official data showed this week.