Westpac has announced its position as a foundational bank to Australasia’s first renminbi (RMB) Hub in Sydney following its approval by the People’s Bank of China and The Reserve Bank of Australia in Canberra.
Westpac Group CEO, Gail Kelly, welcomed the announcement, remarking the significance of this milestone alongside a Free Trade Agreement with China would support the development of closer economic ties with China and play to Australia’s strength in financial services.
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"As one of the first banks in Australia to connect with the RMB Hub in Sydney, Westpac is supporting the internationalisation pathway of the Chinese currency across the region.
"The ability to settle transactions in RMB in real time through Sydney will make it faster and easier for customers to trade and transact in RMB.
"As a result of this development, the currency can move freely throughout our region to open up more of China’s economic opportunities for our customers across Asia, Australia and New Zealand," she said.
China is the number one trading nation in the world, and is already Australia’s largest export market, accounting for A$102bn, or more than a third of all Australian exports in 2013. The RMB is the second most used currency in trade finance, but at present very few Australian businesses actually invoice and settle trades in RMB.
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By GlobalData"We anticipate that we will see more financial activity in RMB as liquidity increases and the market embraces the benefits of dealing directly with a clearing bank in Sydney," said Rob Whitfield, Chief Executive, Westpac Institutional Bank.
"We are reaching a tipping point as customers across Asia, New Zealand and Australia are increasingly seeking more RMB products and services. We are responding to this demand and have built a comprehensive offering to support the expected growth in trade and payments settled directly in this currency.
"The benefits are more profound than trade alone. A RMB hub in Sydney will encourage a build-up of Australian-based RMB deposits, deliver larger pools of liquidity and stimulate market activity in RMB-denominated financial products," he said.
Mr Whitfield concluded by saying that Westpac has been active in China for over 40 years and was one of only two Australian banks to be given a market makers licence by the Chinese authorities in April 2013, allowing for direct trading of the RMB/AUD on the China Foreign Exchange Trading System.
"Westpac’s aim has always been to help our customers grow their businesses by facilitating trade and capital flows in the Asian corridor.
"The fact that we will now have an RMB settlement hub in Sydney is a great step towards achieving that aim, as well as an important move towards internationalisation of China’s financial market," he said.
