A practical approach to international monetary system reform

Contents About the Project and Paper Series 1 About the Authors 1 Acronyms 2 Executive Summary 2 Introduction 2 THE RMB Trade Settlement System 6 Background 6 The Trade Settlement Framework 8 The Ensuing Results of the RMB Trade Settlement Scheme 10 Lessons Learned 14 Expanding and Deepening the Regional Currency Settlement System 15 Expansion of the Bilateral Trade Settlement System 15 Combining [...] The scheme between the PRC and Hong Kong, China, pilot scheme initially allowed the settlement in RMB focusing on the system, progress, impacts on the of trade transactions between five cities in the PRC offshore RMB market and prospects. [...] Participating banks the rmb trAde settlement outside the PRC, on the other hand, can engage system correspondent banks or the clearing bank in the PRC (or both) for RMB business in Hong Kong, China and Background Macau, China to handle the associated settlement On July 6, 2009, the PBoC launched a pilot scheme for of RMB funds at the wholesale level. [...] The Trade Settlement Framework An overview of the RMB trade settlement scheme platform is provided in Figure 1. The system prescribes that participating enterprises have to be accredited by the PBoC and the HKMA in their respective jurisdictions.8 As mentioned earlier, the scope of the framework now includes all trading 7. This is different from the CNT that is the currency code of the offshore de [...] On the other hand, the Bank of China Hong Kong (BoCHK) was designated as the sole offshore The Ensuing Results of the RMB Trade clearing bank.9 Essentially, the BoCHK is authorized Settlement Scheme to convert foreign currencies into RMB and to utilize From an initial 365 mainland designated enterprises credit lines with the inter-bank foreign exchange approved to take part in the pilot RMB trade