2016 looks like the year in which renminbi became well and truly established as an international currency. In an article for leading treasury magazine, GTNews, Barbara Herbert, Commerzbank’s renminbi expert, and Michael Rugilo, the bank’s Asia expert, delve into the reasons behind the currency’s corporate uptake.
In the article, ‘The rise and rise of renminbi’, the experts show the yuan continued to grow its market share of global payment transactions, ending 2016 in fifth place in the world league tables; they explain that offshore renminbi liquidity improved as more banks around the world were designated as ‘clearing hubs’; and they note that China’s Cross-Border Interbank Payment System – which aims to facilitate global use of the currency by cutting costs and process times – got off to a successful start.
Drawing on the results of a landmark Commerzbank survey of corporate customers, Rugilo and Herbert also outline the range of benefits invoicing in the yuan can offer – finding that companies can better penetrate Chinese markets, ramp up their profitability, hedge their exchange risk, and improve their cross-border liquidity. They argue that with the close support of banks, treasurers can continue to take advantage of the currency in the years ahead.
The article can be read online here.