The rise of renminbi (RMB) is rapidly transforming the global financial landscape. The launch of the Cross-Border Interbank Payment System (CIPS) and the inclusion of the RMB in the International Monetary Fund’s Special Drawing Rights basket of currencies are the latest major landmarks on the RMB’s path to internationalisation.
CIPS, which provides financial institutions with a platform for clearing international RMB payments, makes cross-border transactions into and out of China much more efficient. It connects China with offshore RMB centres in the Asia, Oceania, Europe and Africa time zones, and presents exciting long-term opportunities for our clients as they seek to grow their RMB business.
We were one of the first international banks qualified under the first phase of CIPS. On the first day of the launch of the platform, we completed over 200 RMB cross-border transactions for global clients based in Asia, Oceania and Europe. We have processed more than 9,000 cross-border payment transactions via CIPS in 2015. The first to be processed on the system was a direct clearing from China to Luxembourg for IKEA, the Swedish home furnishing retailer. China is one of IKEA’s fastest-growing markets, and direct cross-border RMB clearing enables a simpler payment route and enhances liquidity management for the retailer.
The liberalisation of China will continue to encourage international use of RMB for trade or investment, and CIPS provides the infrastructure essential to support the growth of the RMB cross-border payment traffic. Leveraging our global footprint and clearing network, local cash management expertise, and the strength of our franchise in China, we are at the forefront of capturing the opportunities that will arise from this trend.