Commerzbank has introduced renminbi services that will include letters of credit (L/Cs) and bank guarantees in the Chinese currency for its customers in Germany.

The use of the renminbi in trade with China should provide those customers - who have hitherto tended to trade with China in US dollars - with additional flexibility to manage their foreign exchange exposures.

Guarantees and L/Cs

Commerzbank's renminbi accounts will allow customers to transact in the Chinese currency when making payments directly to China from Germany and when receiving payments from China.

The bank will provide a range of renminbi services, including L/C opening and settlement as well as bank guarantee issuance.

Commerzbank already provides renminbi services at its branches in Shanghai, Beijing and Hong Kong.

Global expansion

Renminbi financing by foreign banks began in 2009 on a limited scale with a pilot scheme available to banks in Asian countries for deals with just a handful of Chinese companies.

In July 2010, the renminbi settlement scheme was expanded to include more Chinese companies and to allow import and export transactions in the Chinese currency to be executed worldwide.

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