Singapore signs up to Direct Currency Trading with China

Singapore and China will introduce direct trading between their currencies, helping the city-state compete with Hong Kong and London as an offshore yuan hub.

The two nations also agreed on a 50 billion yuan ($8.2 billion) quota for financial institutions in Singapore to invest in China’s domestic securities under the Renminbi Qualified Foreign Institutional Investor, the Monetary Authority of Singapore said in a statement today. The Southeast Asian nation will be one of several locations where Chinese institutional investors will be able to buy securities overseas with yuan under the new Renminbi Qualified Domestic Institutional Investor program, according to the statement.

“The ongoing internationalization of the renminbi continues to accelerate,” said Loh Boon Chye, Singapore-based deputy president for Asia Pacific at Bank of America Merrill Lynch. “Today’s announcement is the next stage in Singapore’s efforts to play a prominent role in the long-term development of this market.” Loh is also the chairman of the capital markets, fx & derivatives working group assisting the monetary authority.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.