Citi Peru has become the first bank in in Latin America to issue letters of credit (L/Cs) in the Chinese currency.

The renminbi-denominated L/Cs are expected to provide additional benefits to the bank's clients who trade with China.

Regional first

Citi has made payments in renminbi for its clients in Latin America since 2011, but this are the region's first L/Cs-denominated in Chinese currency.

L/Cs remain one of the most commonly used payment methods for transactions between Latin American companies and their trading partners in China.

Currency developments

China has been internationalising the renminbi since July 2010, when it opened offshore currency markets in Hong Kong, Taiwan, Singapore and London.

In March 2012, Citi launched a new Latin American trade desk in in Shanghai to help link its Latin American clients with Asia.

Advantages

Citi is able to offer its clients in Peru and 22 other markets in Latin America the new renminbi-denominated L/Cs.

The bank says this provides them with a unique advantage, enabling them to mitigate foreign exchange risks, to improve their terms of trade and to create relationships with Chinese companies.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.\