[PHNOM PENH POST]
ANZ Royal Bank aims to play a larger role in handling transactions in
renminibi, as China’s currency becomes increasingly prevalent, company
officials said yesterday.
Cambodia’s fourth largest bank made its
pitch yesterday, claiming domestic businesses could cut up to 5 percent
from some import costs if they pay their Chinese suppliers in renminbi.
The
Chinese government has introduced incentives to increase usage of the
renminbi, or yuan, including tax rebates of between 15 percent and 18
percent for exporters that bill their customers in yuan.
As a
result, Cambodian businesses that choose to pay in yuan may be able to
negotiate better prices with their Chinese suppliers, said ANZ Royal
Markets Manager Khiev Sophina said.
“I think it’s a big
opportunity for Cambodia’s businesses given the country’s trade flows
with China,” he said at an ANZ client seminar in Phnom Penh.
Khiev
Sophina said Chinese exporters pay not only taxes to the Chinese
government but also hedging costs to protect against currency
fluctuations between the yuan and dollar, which is the typical
settlement currency for Cambodian businessmen.
China’s exporters
therefore could save as much as 20 percent if their Kingdom-based
clients paid in yuan, he said. Khiev Sophina reckoned the savings could
provide those clients some bargaining leverage and possibly bring their
costs down.
ANZ Royal will soon launch a service to facilitate
these payments, he said. The bank and its relevant customers will agree
on an exchange rate for the US dollar and yuan for a set period of time,
with ANZ handling any fluctuation of that rate in the market during the
period. He expects it will take some months before domestic businesses
are able to coordinate with their Chinese partners to begin the process.
ANZ Royal will profit by buying yuan from ANZ Singapore and selling them at a higher rate to clients, he said.
In
a presentation yesterday to clients, Khiev Sophina said bilateral trade
between China and Cambodia reached US$1.12 billion in 2010, up 41.5
percent from the year before. About 70,000 businesses in China presently
qualify for the tax rebates.
ANZ Royal Bank CEO Stephen Higgins
said the growing proliferation of yuan and the devaluation of the dollar
give Cambodian businesses more reason to consider settling bills in the
Chinese currency.
Over time, he expects the dollar to lose its stature as the world’s predominant currency while the yuan ascends in importance.
“Globally it’s going to be far more influential and prominent,” he said of the yuan.
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