China's central bank, the People's Bank of China (PBOC), has established a renminbi clearing bank in Laos. The Industrial and Commercial Bank of China (ICBC) has opened a branch in Vientiane, Laos, to clear and settle renminbi transactions, aiming to promote faster cross-border payment and trade between the two countries. This move is part of China's efforts to expand its renminbi clearing network globally and strengthen economic ties with Laos. The establishment of the clearing bank will facilitate smoother and more efficient renminbi transactions, making it easier for businesses and individuals in Laos to conduct trade with China. [ed424d79]
Meanwhile, Laos is facing a forex crisis and revealing its dependence on China. Bounleua Sinxayvoravong, the head of the central bank of Laos, has been removed by the communist government, raising concerns about the debt-strapped country's forex crisis and reliance on China. It is unclear whether Bounleua was reassigned or fired. The shake-up at the central bank highlights the challenges Laos is facing in managing its foreign exchange reserves and addressing cash outflows. The country may require further assistance from China to mitigate its forex crisis. [27f94d82]
Bangladesh has also included the Chinese yuan in its credit transfer system Real-Time Gross Settlement (RTGS) as part of its de-dollarization plan. The clearing and settlement of the Chinese yuan will be incorporated in the RTGS system from February 4. This decision comes after increased Bangladesh-China trade, fueled by Belt and Road Initiative (BRI) investments from China. The Chinese yuan has proven to be stable and resilient in adverse economic conditions. Bangladesh previously announced that it would settle pending payments to Russia in Chinese yuan instead of US dollars. The central bank of Bangladesh has also allowed banks in the country to maintain correspondent accounts in yuan to facilitate cross-border trade. [a27021aa]
In line with China's efforts to strengthen economic ties with its neighboring countries, OCBC Bank aims to increase contributions from its Greater China and ASEAN markets towards its transaction banking business. The bank plans to intensify its efforts in instant cross-border payments and explore the use of digital currencies for payments and trade. Singapore currently accounts for more than half of transaction banking earnings at OCBC. Hong Kong and mainland China are the fastest-growing parts of the business. OCBC will invest more than $50 million over three years to build up its transaction banking capabilities in Greater China. The bank's largest Chinese clients include Xiamen ITG and its subsidiary ITG Resources (Singapore). [160d9918]