Dhaka, Bangladesh (BBN) – HSBC Bangladesh has announced that it had executed its first Renminbi (RMB) denominated cross border export settlement for Avant Garde Fashion Ltd, a company based in the Dhaka Export Processing Zone.
 
Cross-border trade settlements in RMB allow traders to reduce transaction costs, diversify their currency portfolio and hedge foreign exchange risk, the global bank said.
HSBC’s Global Connections report shows that growth in Chinese merchandise exports is expected to be most rapid to other economies in Asia. Bangladesh’s exports to China are expected to grow 12% in 2012, 15% annually between 2013-15, 14% annually between 2016-20 and 13% annually between 2021-30. The research reveals that China’s exports within Asia (ex Japan) are expected to expand 15% annually during 2013-2015, compared to 12% globally in the same time period.
 
A survey recently conducted by HSBC in China identified a clear cost advantage to businesses outside Mainland China that choose to settle their trade in RMB. Half of all Chinese corporates surveyed stated they were willing to offer better pricing or terms in return for using RMB to settle trade: 41% revealed they would be willing to offer discounts of up to 3% and 9% willing to offer even greater discounts.
 
The HSBC has consistently been at the forefront of RMB developments both onshore and offshore. The Group has established RMB capabilities in over 50 markets worldwide, and issued the first international RMB bond in London earlier this year. In Mainland China, HSBC provides RMB cross-border settlement service across its entire branch network spanning 27 cities, the largest geographic coverage among all foreign banks in China.
 
Andrew Tilke, Chief Executive Officer of HSBC Bangladesh said “We are delighted to support AFL in this transaction – HSBC forecasts that Renminbi will be a top-3 global trade currency in the next 5 years, and our ability to help customers maximise potential from this development is unrivalled. We see trade between Bangladesh and other Asian countries, especially China, growing significantly and our expertise and global reach will be of significant benefit in providing world class products and services to our customers.”
 
BBN/SSR/AD-22Nov12-3:55 pm (BST)