Canada has become the first country in the Americas to complete a cross-border payment in its capacity as an offshore clearing and trading centre for the renminbi (RMB).

The move signals an anticipated increase in letter of credit (L/C) transactions denominated in the Chinese currency involving parties in Canada.

Payment first

The Royal Bank of Canada (RBC) completed the first cross-border payment on the country's new RMB Trading Hub through the hub's designated clearing bank, Industrial & Commercial Bank of China (Canada).

Managing director, head of foreign exchange sales, Americas, for RBC Capital Markets, Philippe Savoy, said he expects the new hub will provide Canadian companies with better access to Chinese trade and investment opportunities.

L/Cs and bank guarantees

Prior to the recent announcement of a RMB Trading Hub in Canada, RBC already offered a broad suite of RMB products for clients in North America, Europe and Asia Pacific.

The Canadian bank also provides clearing and cash management services for Chinese banks with operations in Canada, and supports Canadian trade with China through advice, products and solutions including the issuance and confirmation of L/Cs and bank guarantees.

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