Rapid rise in Chinese treasurers using cross-border RMB

Nov 26th 2013 | Asia

58% of Chinese treasurers are currently using offshore RMB, up from 36% in 2012.

26 NOVEMBER, SHANGHAI - Nearly six in every ten senior treasury and finance professionals in China (58%) are actively using offshore RMB, for activities such as trade settlement and intercompany loans.

This was the key finding of the "Treasury Verdict" session taken by a live audience poll of senior treasury and finance professionals at EuroFinance's 11th annual conference on Cash, Treasury & Risk Management in China, held in Shanghai.

Some 26% of Chinese treasurers are using cross-border RMB for both trade settlement and intercompany loans, 19% just use it for intercompany loans while 13% use it purely for trade settlement. Just over a quarter of treasurers in China (26%) are not yet using cross-border RMB but plan to in the future, while only 16% say that it is not relevant to them.

The increased use of RMB coincides with a perception among Chinese treasurers that the RMB is set to appreciate against the US dollar in the coming year. Over six in every ten (61%) believe that the RMB will appreciate by up to 5% against the US dollar in the coming year, while 13% think the appreciation will be even greater.

Katharine Morton, EuroFinance's Editorial Director, says: "It is interesting times for the development of the offshore RMB. Over the past year, there has been a clear shift in the number of Chinese treasurers that are using cross-border RMB. This is partly due to central bank rulings that simplified cross-border settlement in China, while corporates have also identified hedging opportunities using the currency that have created business savings."