Corporate and Investment Banking. Trading in Chinese Renminbi

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1 Corporate and Investment Banking Trading in Chinese Renminbi

2 Trading in Chinese Renminbi Standard Bank your trade partner in, for and across Africa Trade and payment solutions using renminbi As China-Africa ties continue to mature, substantially altering the make-up of Africa s political and economic environment, China has front-row tickets to the continent s development. The Standard Bank Group, as a trusted service provider, has the capability to support your requirements in trading and bridging the gap with China using the renminbi. The renminbi (RMB) is the official currency of the People s Republic of China. Since Chinese authorities started developing the renminbi as a currency of international trade, it has been growing in circulation in global markets. Although still regulated the renminbi is being promoted by the Chinese government as legal tender in deals with foreign companies and institutions. While not considered a major currency in terms of volume at this time, the renminbi s projected growth as a currency of trade is considerable. As the currency s global activity grows, it will have an enormous impact on the way business is done in Africa, since China is one of its largest trading partners. 3

3 Trading in Chinese Renminbi Until recently, all payments to Chinese companies were made in US dollars, which added complexity and risk to any transaction. Now that RMB is acceptable as a currency of global trade, the Standard Bank Group is well positioned to facilitate the clearing thereof. The Standard Bank Group was one of the first financial institutions to recognise and focus on the growing relationship between Africa and Asia. Our relationship with Asia, and with China in particular, is underscored by our close ties with the Industrial and Commercial Bank of China, which holds a 20% stake in the Standard Bank Group. As the largest banking group in Africa, we are well placed to provide payment clearing and trade settlements in the domiciled currency of mainland China through a centralised solution designed to meet your requirements. A growing suite of RMB solutions Financial institutions The Standard Bank Group provides a facility for financial institutions looking for an RMB settlement solution for their clients in Africa. The facility can also be used to sell currency, hedge currency risks and provide leverage for short-term funding at low rates. African importers and exporters The Standard Bank Group allows African importers and exporters to settle Chinese trade deals directly in RMB, reducing foreign currency translation risk, aiding price negotiations, promoting price transparency and providing access to lower-cost funding. Chinese importers and exporters The Standard Bank Group s direct RMB settling facility reduces the need for a pricing buffer against currency fluctuations, lessens the cost of international trade, reduces the need for hedging and promotes the use of renminbi as a trade currency in line with the Chinese government s national strategy. Investors The Standard Bank Group provides access to a range of RMB (onshore renminbi traded in mainland China) investment assets such as foreign exchange, money market products, term deposits and bonds. The renminbi market is an attractive investment option both from an appreciation and diversification perspective. Benefits of using the Standard Bank Group s centralised RMB capabilities Payments and trade settlements can be initiated on existing channels in RMB, giving you the option of dealing with your Chinese partners in their native currency and aligning with China s national promotion of the use of renminbi Importers can receive payment in renminbi, making it easier for Chinese exporters to do business with you RMB clearing through a centralised solution for cash management, payments, trade and client services Direct settlement in RMB reduces foreign currency translation risk 4 5

4 Access to RMB loans helps to reduce the cost of funding by improving your working capital cycle and shortening your cash conversion cycle Foreign currency revenue and cash flows are easier to manage The diversification of Foreign Exchange (FX) exposure lessens the impact of USD exchange rate fluct. Contact us For more information on the renminbi service offering contact: Your Trade Sales Manager, or Your relationship manager, or Disclaimer This document has been prepared solely for information purposes by The Standard Bank of South Africa Limited, acting through its Corporate and Investment Bank Division ( SBSA ). Any indicative terms provided to you are provided for your information and do not constitute an offer, a solicitation of an offer, invitation to acquire any security or to enter into any agreement, or any advice or recommendation to conclude any transaction (whether on the indicative terms or otherwise). Any information, indicative price quotations, disclosure materials or analyses provided to you have been prepared on assumptions and parameters that reflect good faith determinations by us or that have been expressly specified by you and do not constitute advice by us and it should not be relied upon as such. The information, assumptions and parameters used are not the only ones that might reasonably have been selected and therefore no guarantee is given as to the accuracy, completeness, or reasonableness of any such information, quotations, disclosure or analyses. No representation or warranty is made that any indicative performance or return indicated will be achieved in the future. This document is not an official confirmation of terms, and any transaction that may be concluded pursuant to this document shall be in terms of and confirmed by the signing of appropriate documentation, on terms to be agreed between the parties. The information in the document is also subject to change without notice. SBSA, or an associated company, may have effected or may effect transactions for its own account in any investment outlined in the document or any investment related to such an investment. Prospective investors should obtain independent advice in respect of any product detailed in this document, as SBSA provides no investment, tax or legal advice and makes no representation or warranty about the suitability of a product for a particular client or circumstance. Transactions described in this material may give rise to substantial risk and are not suitable for all investors. SBSA will only provide investment advice if specifically agreed to by SBSA in appropriate documentation, signed by SBSA. This information is to be used at your own risks, and SBSA makes no representation with regards to the correctness of the information herein. 6 Authorised financial services and registered credit provider (NCRCP15) The Standard Bank of South Africa Limited (Registered Bank) Reg. No. 1962/000738/06 SBSA /14

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