PBoC and Reserve Bank of Australia Agree Bilateral Currency Swap
HSBC has welcomed the announcement of the bilateral local currency swap agreement between the Reserve Bank of Australia (RBA) and the People’s Bank of China (PBoC). “This agreement will help to support continuing growth in renminbi [RMB] liquidity – an important development in the on-going internationalisation of Chinese currency,” said Paulo Maia, chief executive officer (CEO) of HSBC Bank Australia.
“HSBC believes that by 2015 some US$2 trillion of Chinese trade will be settled in RMB, making it one of the top three trading currencies in the world. Given the role of China as Australia’s number one trading partner, accounting for around a fifth of our trade, the RMB is already playing an increasingly important role in Australia’s international trade.
“For businesses that trade with China, the ability to trade in RMB not only reduces their costs and risk with a natural currency hedge but may provide improved trading terms with Chinese suppliers and purchasers. This will also support Chinese corporations wishing to invest abroad with the RMB and for foreign companies wishing to invest in China. It’s important that Australian businesses prepare for the increased use of the RMB,” Maia concluded.