The RMB’s internationalization continues apace

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29 July 2011

The RMB’s internationalization continues apace Venkatesh Somanathan, Deutsche Bank’s Head of Trade Finance in Singapore, and Director, Regional Trade Product Management, Asia, discusses the opportunities and challenges presented by the growing internationalisation of China’s currency.

How have trade finance markets responded to the crossborder RMB (renminbi) trade settlement programme and how successful has it been?

The market’s response has been most positive. While it had been widely anticipated that the programme would be very popular, the rapid rate at which it gained traction and the growth in trade volumes associated with the programme took many by surprise. For example, the proportion of Chinese trade denominated in crossborder RMB jumped from 0.5% in the first quarter of 2010 to 7% during the same period in 2011. This Q1 2011 figure represents around US$55 billion worth of transactions, up 20% approximately on the final quarter of 2010. These numbers give some idea of how wellreceived and successful the programme is.

From the perspective of market participants such as ourselves and our clients, the first priority was to gain a firm understanding of the various...

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