Deutsche Bank announced on May 23 that it has completed the first Singapore dollar/Ooffshore renminbi (SGD/RMB) spot trade to be cleared in Singapore, following the Monetary Authority of Singapore’s announcement that renminbi 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.
“As the world’s leading FX house, Deutsche Bank is proud to be the first to provide renminbi liquidity versus local currency pairs across Asia,” said David Lynne, Deutsche Bank head of fixed income and currencies and commodities, Asia. “Roughly 30% of China’s total trade volume is conducted with Asia ex Japan. Direct local currency/renminbi pricing will help encourage increased renminbi-denominated trade settlement by facilitating corporate hedging of renminbi exposure."
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 renminbi 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.
Deutsche Bank’s Asia-Pacific head of global transaction banking Lisa Robins added, “As trade flows between China and Southeast Asia continue to grow, it is natural that more companies will consider using the renminbi as their currency of choice for bilateral trade. With Deutsche Bank’s expertise in renminbi trade settlement and extensive footprint in Asean, we are well positioned to support our clients with their transactional needs in this part of the region, which we believe has tremendous potential.”
The bank was the first to allow electronic execution of renminbi 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 renminbi FX option trades, CNH cross-currency swaps, and CNH forwards.
