by Sridhar Kanthadai, Regional Head of Transaction Banking, North Asia, and Michael Vrontamitis, Regional Head of Product Management, Transaction Banking, East, Standard Chartered Bank
The rapid pace of the renminbi’s (RMB’s) internationalisation over the last 12 months has fundamental implications for corporate treasury, to the point where immediate action is required. It is no longer a case of considering what to do about the RMB, it is about actually doing it. As this article explains, it is now possible to integrate the currency into a corporate’s global working capital and liquidity management and achieve major benefits.
At virtually every step along its road to internationalisation the RMB has thrown up a succession of opportunities for corporate treasuries. Cost savings, process efficiencies, strategic flexibility and improved control and risk management are just some examples. Individually attractive, but collectively they now make the adoption and incorporation of the RMB into corporate processes virtually compulsory.
It’s all about control
The control benefits of RMB adoption come in a number of forms. As its share of global gross domestic product (GDP) increases (see Figure 1), China is likely to be an increasingly important part of many international corporates’ supply chains and customer bases in the future.