English.news.cn 2011-11-10 22:39:27
JOHANNESBURG, Nov. 10 (Xinhua) -- AfrAsia Bank Thursday launched a current accounts set to expand China-Africa business and trade relations. The bank's South Africa chief representative said the account provides clients with the ability to freely conduct foreign exchange transactions involving Renminbi (RMB) and to make trade related payments directly to China.
"This new service is a very valuable addition to our offering particularly for corporate customers participating in the increasingly important Sino-African business relationships," Colin Grieve said in a statement.
AfrAsia is a Mauritius-based bank with representative offices in South Africa.
"Our customers trading with China will be able to receive, as well as pay, in RMB, subject to certain restrictions, without having to convert their currency exposure, helping them lower their trading costs, reduce foreign exchange risk and strengthen their relationships with Chinese partners," he added. Grieve said with this new service, AfrAsia Bank now provides a whole range of documentary foreign transactions in RMB, including the opening and settlement of letters of credit, the settlement of collection, and the issuance of bank guarantees.
In 2010, China's total trade volume was just over 20 trillion RMB yuan (3.13 trillion U.S. dollars), of which just 506 billion RMB yuan (79.06 billion U.S. dollars), was settled in RMB. In the first half of this year alone, 360 billion RMB yuan (56.25 billion U.S. dollars), of China's total trade was settled in RMB.
"Given the rate of trade growth with China, it is predicted that more than half of the trade between China and emerging markets will be settled in RMB in the next two to four years - our customers need to be ready for this," AfrAsia Bank Money Market executive Jen Ramanah said in the statement.
He said AfrAsia Bank aims to help its clients capitalize on new business opportunities in the Chinese market and the China-Africa trade corridor. He said Chinese companies are displaying an increasing interest in concluding their business transactions in RMB in order to mitigate currency risk.
"With the steady internationalization of China's RMB, it is believed that the Sino-African trade denominated in RMB is set to reach the 100 billion U.S dollars figure by 2015," Ramanah said.
A network of new South-South trading routes connecting Asia, the Middle East, Africa and Latin America, is set to transform the global economy.
James Benoit, AfrAsia Bank chief executive officer said: "As South-South trade picks up, so should South-South capital flows, undermining the U.S. dollar's reserve currency status and fostering the development of major new financial centers, notably in Asia and obviously Mauritius too."