The Monetary Authority of Singapore (MAS) on Wednesday said it welcomed the move by China’s central bank to allow companies and individuals in Tianjin Eco-City to conduct cross-border yuan transactions with Singapore.
“MAS welcomed the directive issued today by the People’s Bank of China (PBC) Tianjin branch that will allow eligible corporates and individuals in the Sino-Singapore Tianjin Eco-city (SSTEC) to conduct cross-border Renminbi (RMB) transactions with financial institutions and corporates in Singapore. This initiative will facilitate greater use of RMB in the region and contribute to the growth of the offshore RMB market in Singapore,” MAS said.
The move follows in the footsteps of the Suzhou Industrial Park where a trial scheme was approved last month.
The People’s Bank of China (PBOC) has released rules to banks to kick off the Tianjin trial, which will allow equity investment funds and individuals to make overseas investments in yuan. It will also let companies in the area take up yuan loans from banks in Singapore.
MAS said the PBC Tianjin’s initiative is similar to the cross-border RMB rules announced on June 13, 2014 by PBC Nanjing branch for the China-Singapore Suzhou Industrial Park.
“Both initiatives are the outcome of the broader agreement at the 10th Joint Council for Bilateral Cooperation meeting in October 2013 between Singapore and China on strengthening economic and financial co-operation,” the Singapore central bank said.
PBC Tianjin’s directive will allow:
(i) banks in Singapore to lend RMB to corporates in the SSTEC;
(ii)corporates in the SSTEC to issue RMB bonds in Singapore;
(iii)equity investment funds in the SSTEC to make direct investments in Singapore and the ASEAN region; and
(iv) individuals in the SSTEC to make RMB remittances to settle current account and direct investment transactions.
The Tianjin Eco-City, launched in 2007, is a joint project of the Chinese and Singaporean governments that aims to develop a template for environmentally friendly cities.
MAS welcomes China"s nod for Tianjin Eco-City-Singapore cross-border yuan ...