The renminbi settlement volume in Malaysia accounts for 1.9 percent of the total trade between China and Malaysia in the first month after the set-up of a renminbi clearing bank in Malaysia in this April, twice the share of the settlement in the bilateral trade for the entire year of 2013, Cai Zhiyong, Malaysia’s Vice Minister of Finance, has said. 

The renminbi settlement not only gradually reduces reliance on the U.S. dollar and contains currency risks, but also cuts the costs of currency exchange with a simplified procedure and provides more currency options, Cai said.

“China is the biggest trading partner of Malaysia in the world, while Malaysia ranks as China’s top trading partner among members of the Association of Southeast Asian Nations (ASEAN). The renminbi has also become the sixth largest currency for global foreign exchange transactions, which is a clear sign of the internationalization of the currency,” he said.

The renminbi settlement will lower the costs of those Malaysia enterprises that keep trade ties with China, he emphasized.

However, the renminbi settlement is still unfamiliar to a majority of small and medium-sized enterprises (SMEs) in Malaysia. Hence, the Bank of China, founder of the clearing bank, is expected to enhance cooperation and improve services, so as to extend the settlement to more enterprises in the country.

Jiang Huaqiang, president of the trade union of Malaysian SMEs, also believed that the renminbi settlement will help enterprises avoid the financial risks incurred by possible interest-rate adjustments of the United States in the future.

Source:Xinhua