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.
Westpac Group chief executive, 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.
“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,” Ms Kelly said.
“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,” she said.
“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.”
China is the number one trading nation in the world, and is already Australia’s largest export market, accounting for AUD $102 billion, or more than a third of all Australian exports in 2013, Westpac said in a statement.
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, it said.
“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,” Mr Whitfield said.
“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.”