OREANDA-NEWS.  March 21, 2014. After the Circular of Shanghai Head Office of the People's Bank of China on Expanding Cross-Border Use of the Yuan in the China (Shanghai) Pilot Free Trade Zone (the "Circular") was released on Feb 20, ICBC Singapore Branch worked closely with Shanghai Branch to provide cross-border RMB liquidity loan worth 100 million yuan to Shanghai Baosteel Pudong International Trade Co. Ltd and 70 million yuan to Sinopharm Group Distribution Center Co.

Ltd. The two loans represent the first cross border credit facilities in the yuan currency between Singapore and Shanghai Pilot Free Trade Zone (the "Zone"), marking a new step for the financial support to the Zone. The loans were settled through the clearing system of yuan clearing bank in Singapore, enabling efficient real-time settlement from Singapore to Shanghai.

The new Circular is another key measure of financial support to develop the real economy in Shanghai Free Trade Zone, facilitate cross-border trade and expand the use of RMB in cross-border settlement. With priority on the real economy, the overseas RMB borrowing clearly sets the upper limit for businesses and non-banking financial institutions within the Zone in borrowing overseas RMB funds, which are required to be used only for  production, operation, project construction within the Zone as well as overseas project construction. The Circular helps businesses and institutions reduce cost in overseas financing cost and improve capital utilization efficiency.    

As renminbi is progressively growing into an international currency, ICBC Singapore Branch, as the local RMB clearing bank, will keep a close eye on the update of RMB policies, said an executive with the branch. The branch will collaborate with ICBC branches in China to launch more innovative RMB products to meet the needs of real economy and serve the bilateral trade.