Singapore, China Agree Financial Services Cooperation
by Mary Swire, Lowtax.net, Hong Kong
29 October, 2014
Singapore and China have agreed to further strengthen financial cooperation through new joint initiatives in the offshore renminbi (RMB) market, capital markets, and insurance.
To promote their international use for trade and investment, direct currency trading between the RMB and Singapore Dollar commenced on October 28, 2014. It is intended that this will lower foreign exchange transaction costs and encourage a greater use of the two currencies in cross-border trade and investment.
In addition, Singapore has proposed allowing China-incorporated financial institutions to issue RMB-denominated debt instruments in Singapore directly, so as to help diversify their long-term funding by allowing them to tap into the international institutional investor base in Singapore.
Singapore and China have also agreed to strengthen cooperation in the areas of capital markets and insurance. The Monetary Authority of Singapore (MAS) and the China Securities Regulatory Commission will study measures to enhance collaboration between the derivatives markets of Singapore and China, while MAS and the China Insurance Regulatory Commission will explore collaborative initiatives in the area of catastrophe risk insurance.
MAS Deputy Managing Director, Jacqueline Loh, said: "Financial cooperation has become a pillar for Sino-Singapore bilateral relations. As China proceeds with its structural transformation and financial reform, financial cooperation between the two countries will grow in importance and mutual benefit."
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