Press Release :: Industrial and Commercial Bank of China (ICBC)
10 AM, December 15th, Moscow – Li Hui, the Chinese ambassador to Russia, struck the opening bell for the direct trading of RMB-Rouble at the Moscow Interbank Currency Exchange. This is the first time that the RMB has ever been directly listed abroad. At 10:01 AM, ICBC Moscow Joint-stock Company ("ICBC Moscow"), a wholly-owned subsidiary of ICBC, as the market maker and clearing bank for RMB-Rouble trading sold RMB 168,000 at 1 yuan against 4.6350 rouble, marking the first trading of RMB in overseas exchanges.
The daily session lasts one hour, according to the rules of Moscow Interbank Currency Exchange, ICBC Moscow concluded five exchange transactions between RMB and Rouble on the first trading day, involving a total of RMB 1,004,000.
Industry insiders said that the success of trading in RMB outside China is another milestone after the pilot started for using RMB as the settlement currency for cross-border trades, also an important event as China moving to internationalize RMB. The quickening pace of RMB's internationalization drive will create enormous business opportunities for the Chinese commercial banks, who are the main holders and operators of RMB funds. They will better compete with the foreign banks in areas they are most adept at and boost their presence overseas. ICBC Moscow being the market maker for the RMB-Rouble trading rightly demonstrates the solid strength of Chinese commercial bank in running RMB business.
As related, the direct trading of a currency on an international Exchange is significant to raise the profile of the currency in the international market. When compared to trading currency over-the-counter, direct trading allows local Russian banks to get hard-to-obtain RMB for their transactions and cash positions and one step further to determine the direct exchange rates between the two currencies. It also brings greater options and more channels for the RMB-Rouble settlements, reduces the conversion cost and exchange rate risks for banks and enterprises from both countries in their trade activities and motivate them to use RMB to settle their bilateral trades.
During its internationalization progress, ICBC has attached high importance and taken the internalization of RMB as the opportunity to push ahead the RMB cross-border business, said an executive with ICBC. ICBC Moscow fully participated in the preparation since Moscow Interbank Currency Exchange kicked off the project in May this year to expand the foreign exchange trade in RMB. ICBC Moscow becomes the market maker and clearing bank and opens RMB cross-border settlement accounts for 33 Russian banks. In the next step, ICBC Moscow will continue acting as the market maker and RMB clearing bank and strictly comply with the regulatory requirements and rules of Moscow interbank currency market to loom large this emerging business of direct exchange between RMB and Rouble. The Branch is making its own contribution for driving the trading and investment activities between China and Russia.
Source: Industrial and Commercial Bank of China (ICBC)
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