China is continuing to develop the renminbi as a world currency by gradually relaxing rules limiting exchange and investment.
The latest move came from the Singapore Stock Exchange (SGX), with an announcement that the trading floors are ready to open to list, quote, exchange, clear and settle renminbi securities.
SGX is the first outside China to clear over-the-counter currency exchanges for the renminbi.
The exchange already lists renminbi offshore bonds.
SGX will also offer dual currency trading in renminbi or singapore dollars.
Magnus Bocker, SGX’s chief executive officer, said: “SGX, as the Asian Gateway, is committed to being the exchange of choice for issuers with renminbi fund-raising needs and for investors who are keen to participate in the China growth story. The listing and trading of renminbi securities on SGX will also extend Singapore’s position as an offshore renminbi centre.”
Renminbi deposits in Singapore already amount to US$9.5 billion.
Meanwhile, Hong Kong Financial Secretary John Tsang told a renminbi trade conference that the city will lead the renminbi liberalisation process.
“In particular, we see important opportunities in diversifying the range of renminbi products, deepening the renminbi market and making the best use of Hong Kong as the leading offshore centre for renminbi -denominated business,” he added.
Tsang explained Hong Kong has built “a stable platform for developing offshore renminbi business supported by three sturdy pillars, namely renminbi banking, bond issuance and trade settlement.
“The mutually supportive nature of these three pillars is crucial. Together they provide the key ingredients for stable and balanced development of offshore renminbi business. They generate offshore RMB liquidity, they open the door for international players to engage in renminbi markets, and, perhaps most importantly, they create market-driven demand for renminbi financial products,” he said.