Local firms to up RMB payments: BofA Merrill Lynch
By Kathryn Chiu, The China Post
August 13, 2014, 12:02 am TWN
TAIPEI, Taiwan -- Major companies in Taiwan, both locally based and multinational corporations, will increasingly use offshore renminbi (RMB) for payments, according to data compiled and analyzed by Bank of America (BofA) Merrill Lynch.
The data was collected from Taiwan-based treasurers and chief financial officers who attended the bank's Global Transaction Services' annual Taiwan Treasury Exchange conference that took place recently in Taipei.
According to Taiwan's leading treasurers, offshore RMB usage in cross-border payments continues to expand and will gain further traction in 2015. Fifty-five percent of Taiwan-based treasurers polled stated that the RMB is the most relevant currency to the future of their business, ahead of the U.S. dollar's 29 percent and the New Taiwan dollar's 13 percent.
Offshore RMB is currently used by over one-third of Taiwan corporations, with utilization in international business poised to expand significantly. For instance, approximately 30 percent of Taiwan-based treasurers estimate that offshore RMB will be used more frequently by their corporations for cross-border payments over the next year.
Outside of Greater China, treasurers also see opportunities to expand offshore RMB payments into other geographies. Specifically, approximately 25 percent of Taiwan-based treasurers forecast that their corporations will use offshore RMB for cross-border payments into regions outside of Greater China, including Southeast Asia and Europe, over the coming year.
RMB Liberalization Continues
“Taiwan's corporations will continue to embrace the opportunities afforded by the ongoing RMB internationalization program, which is consistent with our ongoing dialogue with clients,” said Kitty Yen, head of Corporate Treasury Sales, Taiwan, BofA Merrill Lynch. “As currency liberalization will continue and business ties with China will inevitably evolve further, Taiwan-based treasurers understand that having a sustainable RMB strategy will be an increasingly vital component of their larger treasury management operations and structure.”