[HONG KONG] Standard Chartered Bank (China) Limited said on Thursday it had completed a yuan clearing transaction for Sweden's Ikea through the China International Payment System (CIPS), the first such deal to be announced hours after Beijing launched the worldwide system.
The bank said it had finished the transaction from China to Luxembourg for the Swedish home furnishing retailer, noting it was the bank's first international yuan direct clearing via CIPS.
China's central bank earlier on Thursday launched the worldwide payment superhighway to encourage greater use of the yuan for trade settlement and investment, confirming an earlier Reuters report. "Direct international RMB payment clearing via Standard Chartered enables a simpler payment route and enhances Ikea's liquidity management," said Lena Li, Treasury manager at Ikea China.
Before the new system was launched, cross-border yuan clearing had to be done either through one of the offshore yuan clearing banks in the likes of Hong Kong, Singapore and London, or else with the help of a correspondent bank in mainland China.
The launch of CIPS will remove one of the biggest hurdles to internationalising the yuan and should greatly increase global usage of the Chinese currency by cutting transaction costs and processing times.
"CIPS will enhance China's connectivity with the global financial system, providing a highly efficient platform for cross-border RMB settlement," said Michael Vrontamitis, head of Trade at Standard Chartered Bank.