Letters of credit (L/Cs) feature in a raft of yuan-denominated trade- settlement services launched this month that aim to facilitate trade for China's manufacturers and traders.

Already, enterprises seem keen to sign agreements to start handling international transactions in yuan for the first time.

Indonesian trade

Bank of Communications says it has signed deals with Shanghai Huanyu Import and Export and Shanghai Silk Group under which the bank will manage cross-border transactions in yuan for the trading company.

The bank will handle yuan-denominated L/Cs issued by overseas banks. Already, the Chinese bank has received a 90-day yuan L/C issued by PT Bank ICBC Indonesia on behalf of PT Indotruck Utama, with Salim Van (Shanghai) listed as the beneficiary.

Raft of services

In Hong Kong, lenders including Bank of China and HSBC have planned a full range of yuan-denominated trade settlement services for their customers.

Bank of China's yuan-denominated services for clients in Hong Kong will include L/C issuance, negotiation and discounting as well as import loans and invoice financing.

HSBC's Hong Kong operations will also issue L/Cs as well as offer yuan remittances with no daily limit and yuan-denominated trade finance for qualified customers.

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