OREANDA-NEWS. January 19, 2015. Since authorized by the PBOC to act as the RMB clearing bank in Singapore in 2013, ICBC Singapore Branch has seen strong growth in RMB clearing business and boosted the development of local RMB market.

Statistics show, by the end of 2014, the branch completed total RMB settlements of over RMB 40 trillion, of which RMB 37.5 trillion was completed in 2014, over 13 times the value of RMB 2.6 trillion recorded in 2013.

The sound clearing system is a critical factor for expanding the cross-border use of RMB and promoting the offshore RMB markets, while overseas RMB clearing banks are the key hub for inbound and outbound flows of RMB. The designation of Singapore Branch as the local clearing bank has strongly driven the accumulation of the RMB capital pool in local market, lowered RMB transaction costs, brought convenience and opportunities to local customers in terms of diversified RMB investment and financing products, and boosted market activity and attractiveness.

First, RMB clearing efficiency has been substantially improved. By leveraging ICBC’s leading RMB clearing system, professional and efficient clearing services, the branch has so far opened 90 RMB clearing accounts for all participating banks, with direct service coverage in 38 countries and territories, and the first-pass yield of clearing messages rising to 85%, a global leading level. The branch has continued to step up its marketing efforts and fully support new business demand of all participating banks. It pioneered in launching the “online clearing” service.

Second, the RMB capital pool has seen rapid expansion, driving consistent growth of the RMB-denominated asset/liability scale in the Singaporean market. By the end of 2014, the branch took in RMB deposits, rising nearly 4 times than in 2013, and posted total assets over 5 times that of 2013. According to the data released by the Monetary Authority of Singapore, by the end of the third quarter of 2014, RMB deposits in the country totaled RMB 257 billion, representing a considerable increase of 31.8% over the end of 2013.

Third, RMB products have continued to be enriched. In July 2014, Singapore Branch successfully launched the service of cross-border allocation of RMB banknotes, and realized direct outbound allocation from Chinese mainland for the first time. It has allocated around RMB 250 million RMB banknotes to Singapore by far, meeting the demand of the local market for RMB cash. Furthermore, RMB investment products in local market have been increasingly diversified, which is demonstrated by the strong start of the RMB bond market. For example, the total issues of “Lion City Bonds” amounted to RMB 12.7 billion, of which 68.5% was underwritten by Singapore Branch.

Fourth, the offshore RMB markets have been increasingly active. The branch has positively played its role as a fund reservoir, and invigorated the RMB forex market by engaging in RMB forex spot/forward/swap trading, cross-border RMB purchase and sale, and participating in direct RMB-SGD transactions and RMB futures market-making and trading. In addition, it has also met market demands for RMB funds through financial market business such as RMB money market financing, RMB-denominated term deposits and daylight overdraft. It has provided liquidity of up to RMB 1.1 trillion for the participating banks and the local market amidst liquidity squeeze in the offshore market, and mitigated price fluctuations in the local RMB market.

An ICBC official said that Singapore Branch would continue to be committed to the innovation and promotion of new products and services, strengthening cooperation with the Group and other RMB clearing banks, boosting the 24-hour nonstop RMB clearing service, and further enhancing service quality. Meanwhile, the branch will actively accelerate the construction of a local RMB real-time gross settlement system (RTGS), strengthen the advantages of the Singaporean offshore RMB market by building a better financial service infrastructure, and promote the cross-border use of RMB in strict compliance with the requirements of both Chinese and Singaporean regulators.