Treasury Management Internation Logo

Leading Global Partners Act to Boost RMB denominated Trade Finance in Emerging Markets

Published 

New York – IFC, a member of the World Bank Group, and Standard Chartered Bank have signed a landmark risk sharing facility, which will increase the amount of Renminbi (RMB) denominated trade finance available to Chinese banks, as well as corporates and businesses in China and across Asia and other emerging markets involved in imports and exports to China. This marks IFC’s first venture into RMB denominated cross-border trade finance, building on the success of IFC’s award winning global trade programs.

The facility of up to RMB 3 billion (USD 500 million equivalent) brings together leading market players and is anchored with an investment of up to USD 250 million from Standard Chartered and USD100 million from IFC in a 50:50 risk participation agreement.  An additional USD100 million has been mobilized from regional leader, the Korea Development Bank (KDB), as well as USD 50 million from Swiss Re Corporate Solutions through its subsidiary Swiss Re International SE. During the three-year life of the program, it is expected to finance trade flows of over USD 6 billion (RMB 36 billion).

Peter Sands, Group CEO, Standard Chartered said, “We are proud to partner with the IFC in this landmark RMB agreement that will offer access to affordable credit in developing countries across Asia, Africa and the Middle East. With 28% of China’s international trade expected to be denominated in the RMB by 2020, we are confident that this program will play a key role in enabling trade in a currency that is heralding major changes in the financial system.”

Jin-Yong Cai, IFC Executive Vice President and CEO said, “By reducing trading costs and increasing the participation of smaller, under-represented banks in the RMB trade finance market, this investment will allow suppliers of agricultural products, equipment, and other essential goods to reach new markets, helping support economic growth and boosting shared prosperity.”

Over the past three years, RMB trade finance has accelerated significantly with an increasing proportion of China’s trade now settled in RMB. Funding transactions in RMB provides the benefit of reducing currency risks and transaction costs that have increased due to the volatility of the USD and RMB exchange rate. The programme is expected to create an additional capacity to spur the growth of RMB trade finance, particularly via smaller under-represented banks.

Most recent episodes

HSBC’s Sibos Spotlight: Investing in the Future – from Diversity to Green Deposits

In the final instalment of HSBC’s Sibos Spotlight, Eleanor Hill (TMI) invites Nadine Lagarmitte and Suraj Kalati (HSBC) to consider how corporates’ attitudes to...

25:12

HSBC’s Sibos Spotlight: The ESG Landscape – what every treasurer needs to know

In the third edition of HSBC’s Sibos Spotlight Podcast series, TMI’s Eleanor Hill invites Farnam Bidgoli (HSBC) to provide an in-depth overview of the current ESG...

16:24

The Path to Transformational Global Cash Visibility

Davina Bradley (CEVA Logistics) and Conor Deegan (CashAnalytics) join TMI’s Eleanor Hill to explore how treasurers can transform their cash visibility and forecasting within their business in a matter of weeks using a...

33:16

HSBC’s Sibos Spotlight: Embedding ESG in Trade and Supply Chains

In the second podcast from HSBC’s Sibos Spotlight series, TMI’s Eleanor Hill speaks to Surath Sengupta (HSBC) about embedding ESG into trade and supply chains....

20:58

Lost in Transaction: Overcoming Payments Pitfalls

From simple errors to duplicates, fraud and sanctions violations, there are a number of areas where payments can go wrong – especially in the real-time environment. In this podcast, TMI speaks to Andrew Ferrao...

34:25

HSBC's Sibos Spotlight: Central Bank Digital Currencies

The first edition of HSBC’s Sibos Spotlight series sees TMI’s Eleanor Hill joined by Mark Williamson and James Pomeroy (HSBC) to discuss the hot topic of Central Bank Digital Currencies (CBDCs). Our guests discuss...

25:48

Payments Vision 2025: The Inside Track

Wim Grosemans, Steven Lenaerts (BNP Paribas) and Wim Raymaekers (SWIFT) join TMI’s Eleanor Hill to outline their vision for the payments landscape in 2025. Our guests consider how recent developments such as instant...

28:21

Stepping Out from the Shadows

“Treasurers needs to step out of the shadows and into the sunshine in terms of their strategic contribution.” claims Zitah McMillan, Co-Founder and CEO, Predictive Black. In this podcast, hosted by TMI’s Eleanor Hill, our guest declares that the...

16:54

Why the ‘One Size Fits All’ Approach is Outdated - A Cash Segmentation Treasury Masterclass

With the ongoing low interest-rate environment and increasing regulatory change, it’s more important than ever for treasurers...

23:55

Instant Payments: Instant Rewards

TMI’s Eleanor Hill sits down in the virtual TreasuryCast studio with J.P. Morgan’s Global Head of Real-Time Payments, Cyrus Bhathawalla, to discuss how treasurers can capitalise on the evolving nature of real-time payments. Our guest contemplates the elements...

23:55