Standard Chartered sharpens its yuan advisory edge as currency’s global rise continues

Standard Chartered is enhancing its expertise in the Chinese yuan as the global use of the currency continues to rise. Amid geopolitical tensions and market uncertainty, more companies are turning to the yuan for international trade settlements, raising funds, managing liquidity, and allocating investments. The People's Bank of China (PBOC) has established bilateral currency-swap agreements with more than 30 countries and regions, totaling over 4.3 trillion yuan ($641 billion).

In June, the PBOC announced a pilot program for offshore yuan foreign exchange trading in the Shanghai Free Trade Zone and outlined 11 policy measures to boost Hong Kong's role as a global offshore yuan hub. In response, Standard Chartered appointed Jerry Zhang as its global head of RMB commercialisation, alongside her existing roles, to coordinate the bank's yuan strategy and meet client needs.

Zhang believes the macro environment is highly conducive for greater use of the RMB internationally, citing the demand for international payment trade, financing, risk management, and asset allocation. Standard Chartered has been at the forefront of RMB services and has become one of the first foreign banks to participate in the Cross-border e-CNY Transfer Services (CBETS) platform, which enables faster and more secure cross-border digital yuan settlements.

This move will help internationalise the yuan and create new opportunities for corporate and institutional investors. The bank's "Renminbi in Motion for Corporates" report found that 23% of corporate revenue and 25% of procurement costs are now linked to the yuan, but only 14% of their debt is denominated in the currency. Zhang emphasizes the need to gradually incorporate RMB debt into corporate treasuries to reduce currency exposure.

Hong Kong's RMB Business Facility has been expanded to 500 billion yuan, facilitating loans for corporate clients and helping them balance yuan-denominated debt and revenue. Standard Chartered already provides investors access to mainland Chinese markets through Stock Connect and Bond Connect schemes, but there is potential for wider use of these holdings as collateral for more efficient capital deployment.