This file photo shows a bank employee working in Lianyungang, east China‘s Jiangsu Province, Aug. 11, 2015. (Xinhua/Si Wei)
Mauritius now has the third-largest clearing center for the Chinese currency renminbi (RMB), or yuan, in Africa, after South Africa and Zambia. The recently launched hub is expected to facilitate trade with China, not only for Mauritius but also for the African region.
PORT LOUIS, Dec. 28 (Xinhua) — Mauritius now has the third-largest clearing center for the Chinese currency Renminbi (RMB), or yuan, in Africa, after South Africa and Zambia. Officially launched on December 16, the center aims to facilitate trade with China, not only for Mauritius but also for the African region, several financial experts say.
The presence of an RMB hub in Mauritius is of “considerable interest” not only for the Mauritian domestic market but also for the global business, particularly “the cross-border flows that pass through Mauritius,” said Daniel Essoo, chief executive of Mauritius. the Mauritius Association of Banks, during a recent forum for economic cooperation between Mauritius and China.
Official statistics show that China is the largest source of imports for Mauritius. Almost 18 percent of Mauritius’s imports originated from China in 2021.
“The launch of the RMB clearing center is timely for local Mauritian importers to request Chinese suppliers to invoice them in RMB, and Mauritian banks can make use of the local RMB center for their international settlements,” he explained. Li Lianhong, CEO. Bank of China official in Mauritius.
Since a large proportion of imports into Mauritius come from China, “having this facility (RMB clearing center) here means that it will actually be much easier and hopefully much cheaper for importers to start using the center.” and reduce the FX (foreign exchange) cost,” Essoo repeated. “They may be able to hold RMB balances and can start trading directly in RMB.”
However, Essoo found the RMB clearinghouse in Mauritius “even more interesting” from a regional and global connectivity perspective.
“Mauritius is already and has always been part of (African) regional initiatives, and this idea is to link different payment systems with different financial systems so that Mauritius is really at the heart of this network of payment systems,” Essoo said.
“With the introduction of the RMB clearing house, Mauritius can become a bridge and hub that can link China with Africa,” Li suggested.
Li said China has been Africa’s biggest trading partner for more than 10 years, with bilateral trade rising to a record 254 billion US dollars last year. “Mauritius has the potential and ability to become a bridge for economic and trade cooperation between Africa and China, and even between Africa and Asia,” she reiterated.
According to the Bank for International Settlements, international payments in RMB accounted for 2.7 percent of all currencies in 2021, and the proportion of payments in RMB has continuously increased since then. Meanwhile, the RMB share in the International Monetary Fund’s Special Drawing Rights basket increased to around 14 percent in 2022.
“RMB is the most important currency for emerging markets,” said Mardayah Kona Yerukunondu, first deputy governor of the Bank of Mauritius, adding that “RMB is about to become a very important currency in the world in the coming days.” .
“When the RMB clearing house in Mauritius starts to gain momentum, it will certainly have a spillover effect on the financial sector, prosperity and growth of the economy in general,” added the first deputy governor.
Congratulating Mauritius’ presence as a regional financial hub, Essoo said “we are very fortunate to be considered one of the pearls in China’s strategy for a string of pearls.”
“Having this crown jewel, having this facility (RMB clearing center) means that RMB payments can circulate and increase the volume of payments,” he applauded.
“The RMB clearing house is not just a business, but also a contribution we should make to facilitate the use of RMB in cross-border transactions and bring China-Mauritius-Africa trade, investment and economic cooperation to a new level.” Li said. she concluded. ■
Credit: https://english.news.cn/20221228/590a535c3c49467cae36f0bf8cbf17c5/c.html
