Industrial and Commercial Bank of China (ICBC) Singapore branch has completed the first direct trade of Singapore dollar against the renminbi as a member of China Foreign Exchange Trade System (CFETS). ICBC is China’s largest bank and sole renminbi clearing bank for Singapore.

 

The trade came after the Chinese government yesterday announced the Singapore dollar to be the ninth currency to be directly traded with renminbi on interbank level.

 

ICBC has recently also commenced market making for renminbi futures in the Singapore Exchange.

 

The Chinese currency is already traded directly against the US dollar, the euro, the yen, the pound, the Aussie and New Zealand dollars, Russia's ruble and  ringgit.

 

“The direct trading mechanism will help lower exchange costs, simplify trading operation and facilitate bilateral trades and investment between China and Singapore, and is yet another exciting step forward for the currency’s internationalization,” ICBC general manager Zhang Weiwu commented.

 

As Singapore’s sole renminbi clearing bank, ICBC Singapore is the only local bank that can access CFETS’s direct trading mechanism while other banks will need to obtain pricings from the clearing bank for any such direct trades.