Standard Chartered has inked a Rmb770mn (US$115mn) loan with Asakabank, as the global lender looks to increase the use of the renminbi in cross-border financing.
The facility is the Uzbekistan-based bank’s first renminbi-denominated syndicated loan, and it will use the financing to support clients importing goods from China, it said.
Standard Chartered was sole mandated lead arranger on the deal, which is part of an ongoing collaboration between the two financial institutions.
This includes Asakabank’s plans to open a renminbi account with Standard Chartered in Hong Kong, as well as a memorandum of understanding (MOU) between the two that was signed earlier this month at the Belt and Road Summit in Hong Kong.
The MOU will “support business opportunities across the Hong Kong-Central Asia corridor”, Standard Chartered said.
It added that merchandise trade between Hong Kong and Central Asia exceeded US$324mn last year, which was 27% higher when compared to 2020 figures.
Amin Semmari, chief financial officer at Asakabank, said: “Trade ties between Uzbekistan and China continue to strengthen, driving growing demand for renminbi-denominated financing solutions.
“This transaction reflects the strong commitment of both Asakabank and Standard Chartered to supporting these flows and facilitating cross-border business.”
Lucy Rahal, executive director, public sector coverage at Standard Chartered, added: “The loan and broader collaboration with Asakabank reflect increasing demand for renminbi solutions linked to cross-border business activity and growing commercial links between China and Central Asia.”
In March this year, Standard Chartered argued that denominating trade finance costs in renminbi could offer “immediate bottom-line impact” for corporates as their exposure to the currency accelerates.
Because renminbi interest rates are “structurally below” US dollar rates, corporates could save up to 2% annually if they switch to renminbi for their trade finance, the lender said.
