More European firms favor renminbi for transactions
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E-mail China Daily, October 24, 2012
Citibank recently revealed its renminbi transactions generated out of London had increased by 40 percent since the beginning of the year, and the number of renminbi accounts opened in the UK had risen by more than 80 percent.
"Our renminbi offering is making significant progress across Europe, the Middle East and Africa, and we are keen to leverage the breadth of Citi's network to expand our RMB solutions throughout the region," said Rajesh Mehta, Citi's regional head of treasury and trade solutions for Europe, the Middle East and Africa.
Citi now offers a renminbi service in Nigeria, South Africa, Kenya, Cameroon and Zambia.
The use of the renminbi in trade outside China is around $2 billion a day. Cross-border renminbi processing volume rose 42 percent year-on-year to 1.4 trillion yuan ($222 billion) in the first half of this year, according to Deutsche Bank.
But companies still face challenges using the Chinese currency. The greatest obstacles are the slow payment process and difficulties in obtaining approval for payments from the authorities, according to the survey.
Banks are currently required to physically check the documentary proof of each underlying trade transaction before they can process a renminbi payment on behalf of their corporate clients, which can be a slow process.
The situation may get better as the authorities improve their policies. The People's Bank of China, the nation's central bank, introduced a pilot project in June to simplify the cross-border renminbi payment process.
The project allows certain China-based companies to invoice and settle cross-border trades in renminbi without having to provide documentation for pre-trade verification.
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