Monday, October 27, 2014

China Now Allows Direct Trading Between RMB and the Singapore Dollar

The Singapore dollar is now added to the China Foreign Exchange Trade System which facilitates transactions between the RMB and 10 other foreign currencies.

In the past, companies that wanted to convert a large amount of Singapore dollars to RMB or vice versa had to do so through an intermediate currency such as the US dollar. But now, this is no longer needed.

"This will lower foreign exchange transaction costs and encourage greater use of the two currencies in cross-border trade and investments," the Monetary Authority of Singapore (MAS) said in a news release on Monday.

"This is one thing which the market has been keenly anticipating and waiting for, which is direct trading between the Chinese yuan and the Sing dollar," said Mr Motasim Iqbal, head of Transaction Banking Singapore at Standard Chartered Bank.

"Customers stand to benefit most from the direct trading facility as they can expect lower FX conversion costs as well as faster payments and receipts for their transactions," said Mr Eric Lian, President and CEO of UOB (China).

Once again, this is but another sign of the growing predominance of the Chinese RMB and diminishing dominance of the US Dollar.

Adapted from Original Source