Singapore, China Intensify Links To Boost Renminbi Flows

Tom Burroughes

14 October 2015

Singapore and China yesterday agreed to intensify efforts to boost international use of China’s renminbi currency in the Asian city-state.

The existing cross-border renminbi initiatives between Singapore and the China-Singapore Suzhou Industrial Park (SIP) and Singapore-Sino Tianjin Eco-City (SSTEC) will be expanded to the cities of Suzhou and Tianjin. This means that banks in Singapore will be able to lend renminbi to corporates across Suzhou and Tianjin, and corporates in Suzhou and Tianjin will be able to issue renminbi bonds in Singapore.

Companies in Suzhou and Tianjin will have freedom to repatriate all proceeds raised from bonds issued in Singapore. Corporates in SIP will be allowed to borrow from Singapore-based companies, according to a statement on the Monetary Authority of Singapore website yesterday.

Finally, qualifying privately-owned banks in SSTEC will be allowed to borrow from Singapore-based banks.

China has been looking to promote the renminbi as a global reserve currency on a par with the US dollar, although the International Monetary Fund recently delayed accepting the unit into its international basket of currencies known as Special Drawing Rights.

The SDR is an international reserve asset, created by the IMF to supplement its member countries' official reserves. China has also opened its capital markets more widely to foreign investors as part of its renminbi push. Away from Asia, countries such as the UK have taken aim at winning large chunks of offshore renminbi-related business.