StanChart (S) completes 50m yuan loan transaction linked to Tianjin Eco-City

Singapore

STANDARD Chartered Bank on Tuesday said it has completed a transaction to provide 50 million yuan (S$10.8 million) in cross-border yuan-denominated loans from its Singapore branch to Tianjin Eco-City Keppel New Energy Development Co Ltd (TEC-Keppel) based in Tianjin, China.

The bank said it is the first foreign lender to have completed a cross-border RMB (renminbi) loan to a company in Tianjin Eco-City (TEC). China last year allowed eligible companies and individuals in the TEC, as well as in the Suzhou Industrial Park, to conduct cross-border yuan-denominated transactions with Singapore.

"We believe this is only the beginning," said Patrick Lee, head of corporate and institutional clients in Singapore at Standard Chartered Bank.

"This deal paves the way to more initiatives that can further widen the flow of two-way cross-border RMB transactions between China and Singapore, hence adding to the momentum of RMB internationalisation and the development of Singapore's offshore RMB market."

The yuan has risen to become the world's fifth payment currency, data from Swift showed in late January. It overtook the Canadian dollar and the Australian dollar to reach a share of 2.17 per cent in global payments by value. In fourth spot is the Japanese yen, which has a share of 2.69 per cent, Swift data showed.

Singapore and London are expected to work more closely in building awareness of developments in the offshore yuan market, following the first private sector RMB forum between Singapore and UK held recently.

Industry players are now watching for more linkages similar to the Shanghai-Hong Kong stock connect that started in November. They are also watching to see if China would successfully push to include the yuan in the International Monetary Fund's in-house currency basket.