First Deal of Cross-Border RMB Trade Settlement Will Be Signed in Shanghai Next Monday

Anchor:

Banks in Shanghai are gearing up preparations for the first cross-border trade settlements in Chinese currency. The pilot program will begin next Monday.

CRI reporter Zhang Cheng has more.

Reporter:

In Shanghai, the Bank of China and Bank of Communications have completed all the preliminary procedures related to the pilot program. The first deal is expected to be signed there on Monday.

During the initial phase of the program, it'll be confinded to trade of bulk commodities such as machinery and chemical products.

Yang Zhenyu is a senior official with the Bank of China's Shanghai office.

"When the pilot scheme covers more businesses, our bank will provide full-scale services for worldwide customers. The Bank of China will not only help China-invested enterprises become easily involved in international trade, but also provide a convenience service for foreign companies."

Companies on the Chinese mainland currently have to convert yuan into U.S. dollars or other currencies to settle international trades.

As a result, exporters here and in and neighboring countries have experienced relatively huge losses from exchange rate fluctuations caused by the global financial crisis.

The pilot program is expected to protect exporters from severe exchange rate fluctuations while the financial crisis continues.

Meanwhile, the central bank says it will adopt a series of risk prevention measures for the pilot project.

Su Ning is Vice Governor of the People's Bank of China.

"First of all, we will ensure the authenticity of cross-border business. Meanwhile, we have worked out measures to monitor and put a cap on the total trade volume. By doing so, we will prevent risks brought by the unstable global economy."

On Thursday, the People's Bank of China issued detailed regulations for the pilot program.

Five mainland cities, namely, Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan, are included in the program.

More than 140 mainland companies have been selected to use yuan to settle deals with firms in Hong Kong and Macao and other regional trade partners.

Zhang Cheng, CRI news.