KUALA LUMPUR: Given the upward trend in bilateral trade between China and Malaysia, there is a great potential of regional currencies being used for bilateral settlement, the Bank of China (Malaysia) Bhd (BOCM) said.
“We anticipate the usage of ringgit or renminbi (RMB) for bilateral settlement will become more extensive,” said its chief executive officer Wang Hongwei.
He said there would be great opportunities for the bilateral trade growth between China and Malaysia to reach new heights of US$160 billion (US$1 = RM3.15) by 2017 as concluded during China President Xi Jinping’s visit last year.
“We have witnessed an exciting upward trend in bilateral trade between China and Malaysia, which stood at US$106 billion in 2013.
“China has continuously been Malaysia’s largest trading partner in term of import and second largest for export,” he said at the ‘RMB Globalisation – Milestones & Future Prospects’ Conference here yesterday.
The renminbi has celebrated its fifth anniversary of cross-border use since its pilot scheme in 2009.
The amount of cross-border renminbi settlement in 2013 reached 4.63 trillion yuan (1 yuan = RM0.51), Wang said, adding that it was conducted in 222 countries with over 2,000 banks participated in overseas renminbi payment and clearing.
Based on Swift data statistics, he said the total renminbi clearing amount in Malaysia hit RMB1.15 trillion in the first half of 2014, an increase of 104.5 per cent from 2013, whereby BOCM being the renminbi onshore settlement institution, captured 60 per cent of the total clearing volume.
Wang said the bank regarded Malaysia as a strong emerging market with the capability of becoming the leading hub in Asean, surpassing Singapore.
He said BOCM had been identified as a significant overseas business development focus and the Bank of China group had approved an additional capital injection of RMB880 million to be invested in Malaysia.
BOCM is owned by the Beijing-based Bank of China Limited and currently has seven branches in Malaysia, namely in Kuala Lumpur, Puchong, Klang, Penang, Muar, Johor Bahru and Kuching. — Bernama