China, Africa using more RMB for direct trade settlements

Bank of China says more direct RMB settlements needed.

Qiu Zhikun, general manager of the Johannesburg branch of the Bank of China said more direct RMB settlement services are needed with growth in trade and investment between China and Africa.

China-Africa trade was almost US$200 billion in 2012 with China's trade with South Africa alone reaching US$60 billion. Mutual investment has also increased rapidly.

BOC has opened more than 1,000 offshore RMB clearing bank accounts in more than 80 countries over the last four years, forming a global coverage of the RMB settlement network, Qiu said.

The Johannesburg Stock Exchange has launched rand/RMB exchange hedging derivatives and the trading volume had been growing rapidly.

South Africa handled 18% of all RMB settlement business in Africa in 2011, and that RMB clearing business will grow substantially in the future, said Nedbank.

By simplifying settlement, RMB direct settlement will help lower commodity prices and add a competitive edge.