Rapid increase of RMB Settlement in Cross-border Trade in Ningbo
- Details
- Category: Ningbo Business
- Published: Tuesday, 21 May 2013 16:35
"In the first four months in 2013, we have nearly 50% of the export trade to Germany settled by RMB, and this alone has cut down the losses of 400,000 yuan possibly brought out by the appreciation of the yuan. Meanwhile, the RMP settlement has helped us to save the money in the clearing of currency in need of hedging, " said Hui Zhen, Fund Manager of Cixi Modern Foreign Trade Company, Ltd, about the advantages of the RMB settlement for companies.
Last year, the range within the currency trade of the RMB against the USD expanded to 1%. Since then, the exchange rate of the RMB against the USD has obviously had a wider range. Accordingly, Ningbo has witnessed an increasing number of foreign trade enterprises using RMB for business settlement, to mitigate the risk of exchange fluctuations. According to the statistics from Ningbo Central Branch of the People's Bank of China, in the previous 4 months, the aggregated settlement amount of the RMB settlement in Ningbo ran up to 38.823 billion yuan, up by 50% year on year. Ningbo had more than 1,100 enterprises to settle by RMB, cutting the costs of nearly 100 million yuan. Ningbo has trade with 126 countries in all the five continents and RMB settlement is adopted in all those countries. Besides, the distribution of RMB settlement is more rational, with a steady rise of the proportion of the settlement in Europe, Japan, and Korea.
The cross-border RMB settlement has not only benefitted enterprises, but also provided commercial banks with a new business growth point. "As Ningbo has a considerable amount of import and export enterprises, and the exchange rates of USD, Euro, and Yen fluctuate in a wide range and in this context, adopting the method of the RMB settlement contributes to the aversion of exchange rate fluctuations for companies. Apart from that, by RMB charges instead of foreign currency charges, it also greatly shortens the remittance route for them, promoting higher efficiency of fund utilization," said one relevant clerk from the Department of International Settlement, Ningbo Branch of Bank of China. In the previous 4 months, Ningbo Branch of Bank of China has its cross-border business settled by RMB reaching up to 13.377 billion yuan, ranking once again No.1 in Ningbo for the total amount of all the market businesses.
