Citi has become the first bank to issue a renminbi (Rmb)-denominated letter of credit (LC) in Latin America.

The bank issued the LC from its Peruvian subsidiary, with Citi China confirming it on the other side of the transaction.

While the identity of the client has not been revealed, GTR understands that the transaction took place in the retail sector and was worth Rmb226,872 (around US$37,000).

A bank spokesperson says that the LC facility is now available to any client in the area and that Citi is hoping to capitalise on growing bilateral trade between the two regions.

He continues: “The effect will be highly positive since it will open the door to the expansion of the Rmb outside of Asia. Close to 75% of Rmb transactions are settled within Asia and, with the continuing challenges for the Chinese economy in 2014, the LatAm market, estimated to being close to US$200bn in bilateral trade, will facilitate cross-currency transactions without using positions in US dollars.”