Citi Bank RMB Settlement Service in Sri Lankae will Eiminate Cross Currency Exchange Risks as Trade with China Continues to Grow

11th January 2012, www.news360.lk

Citi’s global transaction services has launched its renminbi settlement services in Sri Lanka, said a Media report.

The latest move of the Citi comes as the trade volume between Sri Lanka and China continue to grow.

The report says this solution will help Sri Lankan firms by eliminating cross currency exchange risks.

The new Service is aimed at enabling companies to open and maintain renminbi accounts in renminbi with Citi, and make renminbi payments directly to the beneficiaries.

The service by Citi in Sri Lanka follows after the country recognized the Chinese currency as a settlement currency.

Trade between Sri Lanka and China is growing as the Asian giants influence and engagement in the Island is growing.

China has already financed or in the process of financing key infrastructure development projects in Sri Lanka including financing the Hambantota Port.

Related Info :

• Sri Lanka, Mongolia & Iraq to Lead Growth States of 2050, 3G Index of Global Growth Generators of Citibank Chief Economis

Sri Lanka Allows Renminbi in International Transactions as Trade & Investment with China Grows

30th June 2011, www.lankabusinessonline.com

Sri Lanka will allow international transactions to be conducted through banks in Renminbi, China's currency, as trade and investment with the country grows, the island's central bank said. The monetary authority said China's currency has been "gradually evolving as a globally acceptable currency."

"China is recognized today as the world’s second largest economy, while also being a leading player in international trade, investments, and foreign reserves," the Central Banks said in a statement.

"Since Sri Lanka too has a growing volume of trade and investments transactions with China, the use of the Chinese currency, Renminbi, in banking transactions would significantly facilitate such trade and investments."

Sri Lankan banks are now permitted to do international transactions in the Australian Dollar, Canadian Dollar, Danish Kroner, Euro, Hong Kong Dollar, Yen, New Zealand Dollar, Norwegian Kroner, Sterling, Singapore Dollar, Swedish Kroner, Swiss Franc and US dollars.

China has become a key donor of Sri Lanka in recent years and is a key source of imports to the country. Political links between the two countries have also strengthened.

China's currency is pegged to the dollar, and has large US reserves, indicating that the currency is ultimately mostly backed by US government debt, but its central bank has been gradually appreciating it against the US currency.

China invented paper money, but its use was banned following high inflation and economic collapse.

From 1971, the world has again moved to paper fiat money.

Related Info :

• China’s Currency Reserves May Top $2 Trillion for First Time

• Sri Lanka to Be Regional Air & Ocean Traffic Hub