BabuK
JF-Expert Member
- Jul 30, 2008
- 1,845
- 329
Dar es Salaam. Stanbic Bank Tanzania has begun to trade the Chinese currency Renminbi (RMB), the move aims to provide the business community with faster and discounted trading opportunities abroad.
According to Stanbic Bank head of global markets, Mr Zainul Chandoo, by trading in RMB, local traders seeking to source items from China are offered better pricing and special loans as well.
They also stand to benefit from no foreign currency exposure due to changing exchange rates and better credit terms as a result of faster transaction dealings as well as develop improved business relationships with their suppliers, Mr Chandoo told The Citizen in a telephone interview.
China is already the worlds biggest exporter and second largest economy and is likely to achieve top global economic status in the coming years.
Therefore as a financial institution, we have to keep up with the financial world and ensure we offer the best solutions to our customers so as they can move forward.
The RMB is a settlement currency that allows both traders and suppliers in China to trade in one currency.
He pointed out that the currency solution facilitates better trading opportunities as well as empowers the banks customers to negotiate for better prices.
The banker explained that the currency also enables traders to negotiate for discounts because of the economic benefits the Chinese exporters gain through using RMB as opposed to other foreign currencies such as the US dollar or euro, as the settlement will avoid going through the State Administration of Foreign Exchange (SAFE) for foreign income.
This, in turn, shortens the settlement cycle and reduces working capital cost and can result in up to 10 per cent discounts of the underlying transaction value, he added.
In addition, the suppliers in China are enabled to get faster tax rebates as they qualify for automatic tax refund or exemption on qualifying export products at the moment of invoicing, providing a significantly faster rebate than if other currencies are up to 90 days faster because they do not have to wait for the payment to be cleared as well as VAT benefits.
source: THE CITIZEN
According to Stanbic Bank head of global markets, Mr Zainul Chandoo, by trading in RMB, local traders seeking to source items from China are offered better pricing and special loans as well.
They also stand to benefit from no foreign currency exposure due to changing exchange rates and better credit terms as a result of faster transaction dealings as well as develop improved business relationships with their suppliers, Mr Chandoo told The Citizen in a telephone interview.
China is already the worlds biggest exporter and second largest economy and is likely to achieve top global economic status in the coming years.
Therefore as a financial institution, we have to keep up with the financial world and ensure we offer the best solutions to our customers so as they can move forward.
The RMB is a settlement currency that allows both traders and suppliers in China to trade in one currency.
He pointed out that the currency solution facilitates better trading opportunities as well as empowers the banks customers to negotiate for better prices.
The banker explained that the currency also enables traders to negotiate for discounts because of the economic benefits the Chinese exporters gain through using RMB as opposed to other foreign currencies such as the US dollar or euro, as the settlement will avoid going through the State Administration of Foreign Exchange (SAFE) for foreign income.
This, in turn, shortens the settlement cycle and reduces working capital cost and can result in up to 10 per cent discounts of the underlying transaction value, he added.
In addition, the suppliers in China are enabled to get faster tax rebates as they qualify for automatic tax refund or exemption on qualifying export products at the moment of invoicing, providing a significantly faster rebate than if other currencies are up to 90 days faster because they do not have to wait for the payment to be cleared as well as VAT benefits.
source: THE CITIZEN
