Industrial and Commercial Bank of China (Thai) (ICBC Thai) has been designated as the yuan clearing bank in Thailand in a move to facilitate cross-border trade settlements and investment as well as lower transaction costs.
The appointment came after the People's Bank of China (PBOC) signed a memorandum of understanding with the Bank of Thailand last month to establish a yuan clearinghouse in Thailand.
"The renminbi clearing bank in Thailand would provide an alternative channel for financial institutions in Thailand in conducting renminbi settlements, other than through corresponding bank channels. This also facilitates better access to the Chinese onshore foreign exchange market," said the Thai central bank in a statement yesterday.
In Southeast Asia, yuan clearinghouses are available in only Singapore, Malaysia and Thailand.
ICBC has overseas yuan clearing bank authorisation in Singapore, Luxembourg, Doha, Toronto and Thailand, said ICBC Thai in a statement.
Thailand is the third-biggest Asean trade partner of China, while China is the biggest export destination and the second-biggest importer of Thai goods.
In recent years China and Thailand have deepened cooperation on trade and finance. In 2013 the bilateral trade volume between Thailand and China reached US$71.3 billion, and the two countries plan to increase the volume to $100 billion in 2015.
On Dec 22, 2014, the central banks of the two countries entered into a 70-billion-yuan bilateral local currency swap agreement.
The approval of ICBC Thai as the local yuan clearinghouse will make it more convenient to offer premium financial services to Chinese, Thai and Asean enterprises and financial institutions so that they can conduct yuan-denominated cross-border transactions, further promoting free and convenient trade and investment between the two countries.