- Jan 25, 2019 -
(The news from Singapore UNL Shipping & Logistics Pte Ltd ).
The bank of China said in a statement that it had signed a three-year bilateral currency swap agreement with the bank of Japan covering rmb200bn/y3.4bn.
In a separate announcement, the central bank also said it had authorized the bank of China in Tokyo to act as a clearing bank for renminbi business in Japan to further facilitate bilateral trade and investment.
The so-called bilateral currency swap agreement refers to the fact that China can directly use RMB or other countries' currencies when settling trade with countries that have signed the agreement, instead of using the us dollar as the intermediary currency for transactions.
The bilateral currency swap agreement between China and Japan was signed in March 2002 as part of the Chiang mai initiative, a multilateral currency swap agreement signed in response to the Asian financial crisis in the late 1990s.
But for a variety of reasons, the agreement lapsed in 2013 and has not been renewed since.Before the expiry, the ceiling on the two countries' currency swaps was about y330bn.
At the summit of China, Japan and South Korea on May 9th, China announced that it would discuss a currency swap agreement with Japan.On May 10, yi gang, governor of the people's bank of China, also met with haruhiko kuroda, governor of the bank of Japan. The two sides exchanged views on cooperation between the central Banks of China and Japan, bilateral currency swap and other issues, and said they have reached principled consensus.
Beijing daily quoted Beijing university of science and technology institute of financial management of the financial department Liu Cheng expressed, monetary bilateral agreements signed between China and Japan, marked the yuan in terms of a convertible took a crucial step, at the same time also means that the yuan can be incorporated into the bank of Japan as a reserve currency, for the bank of Japan used in emergency, this also is equivalent to acknowledge for the renminbi.
National economic association, vice President of Japan, Shanghai foreign economic and trade university, director of the Japan center for economic research zi-lei Chen also mentioned to the first finance and economics, given the trade relations between China and Japan is more closely, expand the scale of the swap is beneficial to avoid exchange rate risk, improve the local currency plays a more important role in economic and trade exchanges: "from the perspective of the tightness of the economic and trade relations between China and Japan, also is more appropriate and reasonable."
The dollar's international currency status has been shaken, while China is increasingly integrated into the world's financial system, and its currency, the renminbi, is "rising" and gaining global importance.
According to unofficial incomplete statistics, at least 28 countries and regions have used RMB as the settlement currency, such as Turkey, Pakistan, Russia, Nigeria, Iran, Algeria and so on...In addition, China has signed bilateral currency swap agreements with Japan, the republic of Korea, Argentina, the United Kingdom, Switzerland, Brazil and other countries and regions.
By 2020, according to HSBC, half of China's foreign trade will be settled in renminbi, which is expected to account for 7 per cent of global central bank reserves.It is expected to rise further to 10% by 2025.
As of October 12, 2018, in the border areas of Vietnam (lang son son, quang ninh, ha jiang, lai chau, Lao jie, kao ping and dien bien), the central bank of Vietnam has issued a notice stating that the settlement of relevant goods and services may be conducted in renminbi, and the payment may be made in cash or by bank transfer.China has become Vietnam's largest trading partner in recent years, and economic ties between the two countries have grown stronger, making it easier, faster and more cost-efficient for the two countries to settle transactions in their own currencies rather than dollars and euros.
On September 16, 2017, Venezuelan President nicolas maduro said his country had started to use the yuan to price oil instead of dollars.Mr Maduro later said on Telesur television: "we have sold oil and all our products in a currency basket. We have priced [oil prices] in renminbi."
Russian President vladimir putin in September 2017 ordered the rouble to become the main settlement currency for all seaport trade in Russia by 2018.Meanwhile, according to Russian media reports, the people's bank of China is aiming to set up a PVP (payment to payment) payment system for Russian ruble and Chinese yuan financial businesses, in an effort to reduce exchange rate risks in trade.Russia, China's biggest crude oil importer so far in 2017, already USES the concept of "" petroyuan" "in its oil transactions with China.
As early as April 2016, China reached a currency swap agreement with Nigeria.Nigeria's central bank deposited rmb65bn, while industrial and commercial bank of China also deposited naira.This means that the merchants or enterprises on both sides of the transaction no longer need to exchange dollars for settlement, but can directly use RMB or naira for settlement in their own Banks, which marks the beginning of the hard currency process in Africa.
Algeria's central bank has gradually used RMB to settle bilateral trade with China since 2016.China is Algeria's largest trading partner, and using the yuan for bilateral trade settlement will reduce the use of dollars and euros, currency exchange losses and bank fees, which is very beneficial to Algeria, said abdelaziz baderdin, former governor of Algeria's central bank.
Iran's central bank announced in 2015 that it would stop using the U.S. dollar to settle transactions with foreign countries and sign foreign trade contracts in currencies including the Chinese yuan, euro and ruble.
Perhaps some people will worry, with the RMB settlement can normal tax rebate?The answer is: no problem.
To put it simply, it can be understood that the cross-border RMB is equal to the foreign currency whose exchange rate is 1, and the operation mode is the same as the us dollar settlement.Also don't worry if the payment in RMB from Iran/dubai is not refundable because the refundable has nothing to do with the country of origin of the foreign currency.
It should be noted that if the buyer USES his own RMB account in China to pay, or use the account of a branch or office in China to pay, which is equivalent to domestic trade, there is no tax refund.