Oct 23, 2013

    SGD-yuan direct trading boosts S'pore's hub status

    SINGAPORE and China will introduce direct trading between their currencies, helping the former cement its status as South-east Asia's yuan hub.

    The two nations also agreed on a 50-billion-yuan (S$10-billion) quota for financial institutions in Singapore to invest in China's domestic securities under the Renminbi Qualified Foreign Institutional Investor programme, the Monetary Authority of Singapore (MAS) said in a statement yesterday.

    Singapore will be one of several locations where Chinese institutional investors will be able to buy securities overseas with yuan under the new Renminbi Qualified Domestic Institutional Investor programme.

    "Financial ties between the two countries have deepened considerably, and Singapore is well-placed to promote greater use of the (yuan) in international trade and investment in the years to come," said MAS managing director Ravi Menon.

    Singapore started yuan-clearing services in May, when HSBC Holdings and Standard Chartered sold the country's first "dim sum" bonds.

    Further details on direct currency trading will be announced separately, while new measures are being studied to allow cross-border flows of yuan between Singapore and China's Suzhou Industrial Park as well as Tianjin Eco-City, MAS said.

    The British government announced last week that direct trading between the yuan and the British pound will be allowed, following similar arrangements that permit yuan trading with the greenback, Japan's yen and Australia's dollar.