ICBC Singapore to start clearing renminbi

Will start doing so for participating banks today.

Analysts said this could divert some renminbi flows from Hong Kong because another renminbi clearing bank apart from the Bank of China (Hong Kong) can now provide the service.

Users of renminbi will look for a participating bank that can meet their demands, rather than just having a clearing bank nearby. Analysts believe the use of the renminbi will increasingly become part of day-to-day business for anyone trading with or investing in China.

With the availability of competitive renminbi clearing, the increase in volume of renminbi -denominated trades through Singapore should increase the overall pool of renminbi liquidity outside China, which will in turn accelerate the development of new offshore renminbi products and services.

Live clearing in Singapore is a major milestone in the development of the renminbi as Singapore is widely expected to serve as a gateway for the use of renminbi in Southeast Asia. Singapore is the primary financial, commodities, and currency trading hub in the region.