First NZ cross-border Renminbi transaction completed

August 25 2010

The first New Zealand cross-border Renminbi (RMB) transaction directly with China has been completed according to The National Business Review.

This follows the extension of the Chinese government's RMB trade settlement pilot programme to include all countries in the world in June.

HSBC Bank completed the first RMB transaction last week for Longbeach Holdings, an apparel and fashion business that owns iconic Kiwi brand Swanndri.

Most New Zealand-China trades occur in US dollars, which exposes companies to exchange rate risk on the $NZ -$US conversion and then again on conversion from $US to RNB.

The extension enables New Zealand businesses to pay suppliers or business partners in China in yuan, rather than the US dollar.

David Griffiths, HSBC New Zealand chief executive says the bank expects to see increasing demand for offshore RMB trade and payment solutions.

Before June only ASEAN countries were able to complete transactions directly with China.