Ravi Menon: Financial cooperation between China and Singapore
Congratulatory remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of
Singapore, at the inauguration of ICBC Singapore RMB Clearing Bank, Singapore,
2 April 2013.
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Mr Jiang Jianqing, ICBC Chairman,
Mr Dai Bing, distinguished guests, ladies and gentlemen, good morning.
1. I am happy to join you at this morning's ceremony inaugurating the Industrial &
Commercial Bank of China as the Renminbi clearing bank in Singapore.
2. Today's event marks a key milestone in the financial cooperation between China and
Singapore. It is the fruit of a strong and substantive collaboration between the Monetary
Authority of Singapore and the People's Bank of China.
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MAS extended Qualifying Full Bank (QFB) privileges to ICBC and Bank of China in
October 2012 as part of the China-Singapore Free Trade Agreement.
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PBC then named ICBC Singapore as the RMB clearing bank in Singapore.
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Last month, MAS and PBC doubled the size of their bilateral currency swap facility
from RMB150 billion to RMB300 billion. The scope of the swap facility was
expanded to allow MAS to provide RMB liquidity to banks in Singapore.
3. Singapore is the first regional financial centre outside Greater China to have a RMB
clearing bank. Offshore RMB activities in Singapore will be underpinned by the strong and
growing trade flows between the region and China.
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Singapore's bilateral trade with China exceeds US$80 billion.
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Trade between ASEAN and China is at a record US$400 billion.
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This large and growing cross border trade will fuel greater RMB trade settlement
activity in Singapore over time.
The RMB clearing bank will be an important channel for RMB liquidity to circulate between
Singapore and China.
4. Singapore's deep and liquid capital markets will be able to support RMB financing needs
in the region. We have already seen companies here issuing RMB-denominated bonds. The
Singapore Exchange has announced that it is ready to quote, trade, clear and settle
RMB-denominated securities. We can expect the range of RMB-denominated product
offerings to expand, as regional corporates raise RMB financing through bond issuances and
equity listings, to tap on the strong investor base in the region.
5. There will also be strong and growing demand for RMB trade services. There is a critical
mass of international trading companies based in Singapore that will demand such services.
With the new RMB clearing arrangements, we can expect financial institutions based in
Singapore to reach out to local and regional corporates and investors, and encourage
greater participation in the offshore RMB market.
6. MAS is delighted to have ICBC Singapore as our RMB clearing bank. ICBC Singapore has
considerable experience in RMB business and is well placed to launch a reliable and efficient
RMB clearing service. With the QFB privileges it now enjoys, ICBC is committed to growing
its business in Singapore. I understand that among other things, it intends to designate
Singapore as its Southeast-Asian hub for RMB business and will make Singapore its wealth
management hub covering Southeast Asia and South Asia.
7. ICBC and Singapore can together play a big role in promoting the greater use of the RMB
for trade settlements and other economic activities within Asia, and particularly in Southeast
Asia.
8. I congratulate ICBC for its commencement as Singapore's RMB clearing bank. Thank you.